Document:

MANAGEMENT
      AGREEMENT

    

    THIS
      MANAGEMENT AGREEMENT (the “Agreement”) is entered into as of the 15th day of
      February, 2006 by and between U.S. WIRELESS DATA, INC., a Delaware corporation
      (the “Company”) and TRINAD MANAGEMENT, LLC, a Delaware limited liability company
      (the “Manager”).

    

    WITNESSETH:

    

    WHEREAS,
      pursuant to this Agreement the Company shall utilize the Manager’s services on
      an ongoing basis for certain management services from the Effective Date and
      continuing until the expiration or termination of this Agreement pursuant to
      the
      terms contained herein.

    

    NOW
      THEREFORE, in consideration of the foregoing and of the covenants herein, it
      is
      mutually agreed as follows:

    

    
      
        	
              	1.	
                The
                  effective date of this Agreement and the enforceability of the
                  terms and
                  conditions hereof shall be the date upon which the Company effects
                  the
                  initial closing under its currently contemplated financing of up
                  to
                  $2,000,000 of common stock and warrants (such date referred to
                  herein as
                  the “Effective Date”).

              

      

    

    

    
      	
            	2.	
              The
                Company hereby retains Manager and Manager agrees to provide the
                Company
                with management services (the “Management Services”) under and subject to
                all of the terms, conditions and provisions
                hereof.

            

    

    

    
      	
            	3.	
              The
                Management Services shall consist of certain management services,
                including, without limitation the sourcing, structuring and negotiation
                of
                a potential business combination transaction involving the
                Company.

            

    

    

    
      	
            	4.	
              The
                Manager shall provide such Management Services pursuant to the terms
                and
                conditions hereof. The Manager will provide the Management Services
                hereunder with the same care and diligence that it would exercise
                in the
                performance of such services for its own
                operations.

            

    

    

    
      	
            	5.	
              As
                compensation for the Management Services provided pursuant to this
                Agreement, from and after the Effective Date, the Company agrees
                to pay
                the Manager a fee (the “Management Fee”) of $30,000 per month, plus
                reimbursement of all expenses reasonably incurred by the Manager
                in
                connection with the provision of the Management Services. The Management
                Fee shall be payable within fifteen (15) days of the end of each
                calendar
                month.

            

    

    

    
      	
            	6.	
              It
                is expressly understood by all parties hereto that during the term
                hereof,
                the Manager will diligently devote such time and best efforts as
                is
                reasonably required in the performance of the Management Services
                and will
                perform the Management Services conscientiously, efficiently and
                to the
                best of its ability. Except as otherwise set forth herein or in other
                agreements with the Company, nothing contained in this Agreement
                shall
                preclude Manager from engaging in other business
                activities.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        
          	
                	7.	
                  Subjectto
                    Section 8 below, the term of this Agreement will commence on
                    the Effective
                    Date and will continue for a period of five (5) years (the “Term”).
                    

                

        

      

    

    

    
      	
            	8.	
              (a)
                The
                parties hereto may terminate this Agreement at any time by mutual
                written
                agreement.

            

    

     

    
      
        
          	
                	 	
                  (b)
                    Company may terminate this Agreement effective immediately by
                    (i) giving
                    written notice of termination to Manager, and (ii) concurrently
                    therewith,
                    making payment of The a termination fee of $1,000,000 to
                    Manager.

                

        

      

    

     

    
      
        
          	
                	 	
                  (c)
                    Either party
                    may terminate this Agreement effective immediately by giving
                    written
                    notice of termination to the other party hereto only in the event
                    that
                    such other party shall default in any material respect in the
                    performance
                    of any duty or obligation imposed upon it by this Agreement
                    

                

        

      

    

     

    
      
        
          	
                	 	
                  (d)
                    Uponthe
                    termination of this Agreement in accordance with the terms hereof,
                    except
                    as set forth in this Agreement, neither party hereto shall have
                    any
                    further obligation or liability to the other party hereunder.
                    The
                    following provision of this Agreement shall survive such termination
                    or
                    expiration of this Agreement, Sections 8(d), 10, 11, 12, 13,
                    14 and 18.
                    Upon termination of this Agreement for any reason, the Manager
                    shall
                    deliver to the Company all records, contracts, agreements and
                    other
                    papers, documents or other materials which pertain to the Company’s
                    business and activities associated
                    therewith.

                

        

      

    

    

    
      	
            	9.	
              This
                Agreement may not be assigned by the Manager without the prior written
                approval of the Company.

            

    

    

    
      	
            	10.	
              The
                Manager shall not have or claim at any time, by virtue of its performance
                hereunder, any right, title or interest in any trade name, trademark,
                copyright or other similar rights or in any property or other tangible
                or
                intangible assets of any type owned by the Company and shall not
                have or
                claim at any time any right, title or interest in any other material,
                matter or asset of any sort prepared for or used in connection with
                the
                Company’s business or promotion.

            

    

    

    
      	
            	11.	
              The
                Manager expressly agrees that all books and records relating in any
                manner
                whatsoever to the Company’s business and all other files, books and
                records and other material owned by the Company or used by it in
                connection with the conduct of its business, whether prepared by
                Manager’s
                personnel, contract employees or otherwise coming into Manager’s
                possession (collectively, the “Proprietary Information”), shall be the
                exclusive property of the Company, regardless of who actually prepared
                the
                Proprietary Information. All such books and records and other materials
                shall be returned immediately to the Company upon termination of
                Manager’s
                services. The Manager agrees that it shall not disclose, transfer,
                use,
                copy, or allow access to any such Proprietary Information to any
                employees
                or to any third parties, except for those who have a need to know
                such
                Proprietary Information in order to accomplish the requirements of
                this
                Agreement and who are bound by contractual obligations of confidentiality
                and limitation of use sufficient to give effect to this Section 11.
                In no
                event shall the Manager disclose any such Proprietary Information
                to any
                competitors of the Company.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      
        	
              	12.	
                (a)
                  The Company shall indemnify and hold harmless the Manager and its
                  officers, directors, stockholders and employees against all third
                  person
                  claims, liabilities, losses, costs and expenses (including reasonable
                  legal and accounting fees) whether or not covered by insurance,
                  caused or
                  asserted to have been caused, directly or indirectly, by or as
                  a result of
                  (i) any acts or omissions of the Company and its employees or (ii)
                  any
                  breach of or failure to perform any obligation under this Agreement
                  by the
                  Company and/or its agents, employees and/or subcontractors (other
                  than the
                  Manager), except to the extent caused by the bad faith, gross negligence,
                  willful misconduct or fraud of the
                  Manager.

              

      

    

     

    
      	
            	
            	
              (b)
                The Manager shall indemnify and hold harmless the Company and its
                officers, directors, partners and employees against all third person
                claims, liabilities, losses, costs and expenses (including reasonable
                legal and accounting fees) whether or not covered by insurance, caused
                or
                asserted to have been caused, directly or indirectly, by or as a
                result of
                (i) any acts or omissions of the Manager and its employees or (ii)
                any
                breach of or failure to perform any obligation under this Agreement
                by the
                Manager and/or its agents, employees and/or subcontractors, except
                to the
                extent caused by the bad faith, gross negligence, willful misconduct
                or
                fraud of the Company.

            

    

    

    
      	
            	13.	
              Any
                notice required or permitted to be given under this Agreement by
                one party
                hereto to the other shall be in writing and shall be deemed to have
                been
                given as of the second business day following the date of mailing
                if
                mailed to the party to whom notice is to be given, by first class
                mail,
                registered or certified, postage prepaid and properly addressed as
                follows:

            

    

     

     

    
      	 	
              To
                the Manager:

            	
               

            	
              TRINAD
                MANAGEMENT, LLC

              2121
                Avenue of the Stars, Suite 1650

              Los
                Angeles, CA 90067

              Attention:
                Robert Ellin

            	
               

            
	
               

            	
               

            	
               

            	
               

            	
               

            
	
               

            	
              To
                the Company:

            	
               

            	U.S.
              WIRELESS DATA, INC.
              2121
                Avenue of the Stars, Suite 1650

              Los
                Angeles, CA 90067

              Attention:
                David Chazen

            	 
	 	 	 	 	 
	
                        or
                such other
                addresses as the respective parties may in writing to the other
                designate.

            

    

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	14.	
              If
                a proceeding is brought for the enforcement of this Agreement, or
                because
                of an alleged dispute, breach, default or misrepresentation in connection
                with any of the provisions of this Agreement, the successful or prevailing
                party or parties shall be entitled to recover reasonable attorneys’ fees
                and other costs incurred in connection with that action or proceeding,
                in
                addition to any other relief to which such party or parties may be
                entitled.

            

    

    

    
      	
            	15.	
              The
                parties hereto agree that this Agreement constitutes the entire and
                exclusive agreement between them pertaining to the subject matter
                contained herein, and supersedes all prior or contemporaneous agreement
                oral or written, conditions, representation, warranties, proposals
                and
                understandings of the parties pertaining to such subject
                matter.

            

    

    

    
      	
            	16.	
              The
                provisions of this Agreement inure to the benefit of and are binding
                on
                the successor and assigns of the Company and the successor and assigns
                of
                Manager.

            

    

    

    
      	
            	17.	
              Should
                any paragraph or provision of this Agreement be held to be void,
                invalid
                or inoperative, it shall not affect any other paragraph or provision
                herein, and the remainder of this Agreement shall be effective as
                though
                such void, invalid or inoperative paragraph or provision had not
                been
                contained herein.

            

    

    

    
      	
            	18.	
              This
                Agreement shall be governed by the laws of the State of
                Delaware.

            

    

    

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      as
      of the day and year first above written.

     

     

     

      	 	 	 
	 	
              TRINAD
                MANAGEMENT, LLC

            
	 
 	 
 	 
 
	 	By:  	/s/
              Robert Ellin
	 	
              
Name:
              Robert Ellin
	 	
              Title:
                Managing Member

            

    

     

     

      	 	 	 
	 	U.S.
              WIRELESS DATA, INC.
	 
 	 
 	 
 
	 	By:  	/s/
              David Chazen
	 	
              
Name:
              David Chazen
	 	Title:
              PresidentSECURITIES
      PURCHASE AGREEMENT

     

    This
      Securities
      Purchase Agreement
      (this
“Agreement”),
      dated
      as of March 10, 2006, is made by and among Columbia
      Laboratories, Inc.,
      a
      Delaware corporation (the “Company”),
      and
      the Purchasers listed on Exhibit
      A
      hereto,
      together with their permitted transferees (each, a “Purchaser”
      and
      collectively, the “Purchasers”).

    

    Recitals:

    

    A. The
      Company and the Purchasers are executing and delivering this Agreement in
      reliance upon the exemption from securities registration afforded by Section
      4(2) of the Securities Act and/or Regulation D under the Securities
      Act.

    

    B. The
      Purchasers desire to purchase, and the Company desires to sell, upon the terms
      and conditions stated in this Agreement, up to a maximum of $30,010,008.80
      of
      Common Stock and warrants to purchase Common Stock of the Company.

    

    C. The
      capitalized terms used herein and not otherwise defined have the meanings given
      them in Article 7.

    

    AGREEMENT

    

    In
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and the Purchasers (severally and not jointly)
      hereby agree as follows:

    

    ARTICLE
      1

     

    PURCHASE
      AND SALE OF SECURITIES

     

    1.1 Purchase
      and Sale of Securities.
      At the
      Closing, the Company will issue and sell to each Purchaser, and each Purchaser
      will, severally and not jointly, purchase from the Company the number of shares
      of Common Stock (the “Shares”)
      and the
      number of warrants (the “Warrants”)
      to
      purchase shares of Common Stock set forth opposite such Purchaser’s name on
Exhibit
      A hereto
      (the Shares and Warrants referred to collectively as the “Securities”).
      The
      purchase price for each Security shall be $4.04 (the “Purchase
      Price”),
      which
      represents a 10% discount from $4.49 (the “Closing
      Bid Price”),
      the
      closing bid price of the Common Stock as reported on Nasdaq (symbol “CBRX”),
      as the
      4:00 p.m., EST, closing bid price on March 10, 2006. For each one Share
      purchased by a Purchaser, such Purchaser shall receive a Warrant to purchase
      0.25 of a share of Common Stock at an exercise price per share equal to $5.39,
      which represents 120% of the Closing Bid Price, pursuant to a Warrant
      substantially in the form attached as Exhibit
      B
      hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    1.2 Payment.
      At the
      Closing, each Purchaser will pay the aggregate Purchase Price set forth opposite
      its name on Exhibit
      A hereto
      by
      wire transfer of immediately available funds in accordance with wire
      instructions provided by the Company to the Purchasers prior to the Closing.
      The
      Company will instruct its transfer agent to deliver to each Purchaser at the
      Closing a certificate evidencing the number of Shares set forth on Exhibit
      A
      in the
      name of such Purchaser, and will deliver to each Purchaser Warrants to purchase
      the number of Warrant Shares set forth on Exhibit
      A
      in the
      name of such Purchaser, against delivery of the aggregate Purchase Price on
      the
      Closing Date.

     

    1.3 Closing
      Date. The
      closing of the transaction contemplated by this Agreement will take place on
      March 13, 2006 (the “Closing
      Date”)
      and the
      closing (the “Closing”)
      will be
      held at the offices of Kaye Scholer LLP, 425 Park Avenue, New York, New York,
      or
      at such other time and place as shall be agreed upon by the Company and the
      Purchasers hereunder of a majority in interest of the Securities.

     

    ARTICLE
      2

     

    REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY

     

    Except
      as
      specifically contemplated by this Agreement, the Company hereby represents
      and
      warrants to the Purchasers that:

     

    2.1 Organization
      and Qualification.
      The
      Company is duly incorporated, validly existing and in good standing under the
      laws of the State of Delaware, with full corporate power and authority to
      conduct its business as currently conducted as disclosed in the SEC Documents.
      The Company is duly qualified to do business and is in good standing in every
      jurisdiction in which the nature of the business conducted by it or property
      owned by it makes such qualification necessary, except where the failure to
      be
      so qualified or in good standing, as the case may be, would not reasonably
      be
      expected to have a Material Adverse Effect. 

     

    2.2 Authorization;
      Enforcement.
      The
      Company has all requisite corporate power and authority to enter into and to
      perform its obligations under this Agreement, to consummate the transactions
      contemplated hereby and to issue the Securities in accordance with the terms
      hereof. The execution, delivery and performance of this Agreement and the
      Warrants by the Company and the consummation by it of the transactions
      contemplated hereby (including the issuance of the Securities) have been duly
      authorized by the Company’s Board of Directors and no further consent or
      authorization of the Company, its Board of Directors, or its stockholders is
      required. This Agreement has been and the Warrants, at the Closing, will be
      duly
      executed by the Company and constitutes a legal, valid and binding obligation
      of
      the Company, enforceable against the Company in accordance with its terms,
      except as enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization or moratorium or similar laws affecting creditors’ and
      contracting parties’ rights generally, and except as enforceability may be
      subject to general principles of equity and except as rights to indemnity and
      contribution may be limited by state or federal securities laws or public policy
      underlying such laws.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    2.3 Capitalization. The
      authorized capital stock of the Company, as of March 6, 2006, consisted of
      (i)
      100,000,000 shares of Common Stock, of which 41,754,784 shares were issued
      and
      outstanding, (ii) 151,000 shares of Series A Convertible Preferred Stock, par
      value $0.01 per share, none of which were issued or outstanding, (iii) 150,000
      shares of Series B Convertible Preferred Stock, par value $0.01 per share,
      of
      which 130 shares were issued and outstanding, (iv) 6,660 shares of Series C
      Convertible Preferred Stock, par value $0.01 per share, of which 3,250 shares
      were issued and outstanding, (v) 100,000 shares of Series D Junior Participating
      Preferred Stock, none of which were issued or outstanding and (vi) 100,000
      shares of Series E Convertible Preferred Stock, par value $0.01 per share,
      of
      which 69,000 shares were issued and outstanding (clauses (ii) through (vi),
      collectively, the “Preferred
      Stock”).
      All of
      the issued and outstanding shares of Common Stock and Preferred Stock have
      been
      duly authorized, validly issued and are fully paid and nonassessable. Options
      to
      purchase an aggregate of 5,739,500 shares of Common Stock were outstanding
      as of
      March 6, 2006. Except
      as
      disclosed in or contemplated by the SEC Documents, the Company does not have
      outstanding any options to purchase, or any preemptive rights or other rights
      to
      subscribe for or to purchase, any securities or obligations convertible into,
      or
      any contracts or commitments to issue or sell, shares of its capital stock
      or
      any such options, rights, convertible securities or obligations other than
      (i)
      options granted under the Company’s stock option plans, (ii) pursuant to the
      Preferred Stock, (iii) pursuant to warrants exercisable for 725,000 shares
      of
      Common Stock as of March 6, 2006 and (iv) pursuant to the Investment and Royalty
      Agreement, dated as of March 5, 2003, between the Company and PharmaBio
      Development Inc. The Company’s Restated Certificate of Incorporation (as
      amended, the “Certificate
      of Incorporation”),
      as in
      effect on the date hereof, and the Company’s Bylaws (the “Bylaws”)
      as in
      effect on the date hereof, are each filed as exhibits to the SEC Documents
      or
      will be filed as exhibits to the Company’s Annual Report on Form 10-K for its
      fiscal year ended December 31, 2005. 

     

    2.4 Issuance
      of Securities.
      The
      Shares and all of the shares of Common Stock issuable upon exercise of the
      Warrants (the “Warrant
      Shares”)
      are
      duly authorized and, upon issuance in accordance with the terms of this
      Agreement (and in case of the Warrant Shares, the Warrants), will be validly
      issued, fully paid and non-assessable and will not be subject to preemptive
      rights or other similar rights of stockholders of the Company. 

     

    2.5 No
      Conflicts; Government Consents and Permits.

     

    (a) The
      execution, delivery and performance of this Agreement and the Warrants by the
      Company and the consummation by the Company of the transactions contemplated
      hereby and thereby (including the issuance of the Securities) will not (i)
      conflict with or result in a violation of any provision of its Certificate
      of
      Incorporation or Bylaws or require the approval of the Company’s stockholders,
      (ii) violate or conflict with, or result in a breach of any provision of, or
      constitute a default under, any agreement, indenture or instrument to which
      the
      Company is a party or (iii) result in a violation of any law, rule, regulation,
      order, judgment or decree (including United States federal and state securities
      laws and regulations and regulations of any self-regulatory organizations to
      which the Company or its securities are subject) applicable to the Company,
      except in the case of clauses (ii) and (iii) only, for such conflicts, breaches,
      defaults and violations as would not reasonably be expected to have a Material
      Adverse Effect.

     

    (b) The
      Company is not required to obtain any consent, authorization or order of, or
      make any filing or registration with, any court or governmental agency or any
      regulatory or self regulatory agency in order for it to execute, deliver or
      perform any of its obligations under this Agreement in accordance with the
      terms
      hereof, or to issue and sell the Securities in accordance with the terms hereof
      other than such as have been made or obtained, and except for the registration
      of the Shares and Warrant Shares under the Securities Act pursuant to Section
      6
      hereof, any filings required to be made under federal or state securities laws,
      and any required filings or notifications regarding the issuance or listing
      of
      additional shares with Nasdaq. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

    (c) The
      Company has all franchises,
      permits, licenses and any similar authority necessary
      for the conduct of its business as now being conducted by it, except for such
      franchise, permit, license or similar authority, the lack of which would not
      reasonably be expected to have a Material Adverse Effect. The Company has not
      received any written notice of any proceeding relating to revocation or
      modification of any such franchise, permit, license or similar authority except
      where such revocation or modification would not reasonably be expected to have
      a
      Material Adverse Effect.

     

    2.6 SEC
      Documents, Financial Statements.
      The
      Company has timely filed all reports, schedules, forms, statements and other
      documents required to be filed by it with the SEC since January 1, 2005,
      pursuant to the reporting requirements of the Exchange Act (all of the foregoing
      filed prior to the date hereof and all exhibits included therein and financial
      statements and schedules thereto and documents (other than exhibits)
      incorporated by reference therein, being hereinafter referred to herein as
      the
“SEC
      Documents”).
      As of
      their respective dates, the SEC Documents complied as to form in all material
      respects with the requirements of the Exchange Act and the rules and regulations
      of the SEC promulgated thereunder applicable to the SEC Documents, and none
      of
      the SEC Documents, at the time they were filed with the SEC, contained any
      untrue statement of a material fact or omitted to state a material fact required
      to be stated therein or necessary in order to make the statements therein,
      in
      light of the circumstances under which they were made, not misleading. The
      Financial Statements and the related notes have been prepared in accordance
      with
      accounting principles generally accepted in the United States, consistently
      applied, during the periods involved (except (i) as may be otherwise indicated
      in the Financial Statements or the notes thereto, or (ii) in the case of
      unaudited interim statements, to the extent they may not include footnotes,
      may
      be condensed or summary statements or may conform to the SEC’s rules and
      instructions for Reports on Form 10-Q) and fairly present in all material
      respects the consolidated financial position of the Company as of the dates
      thereof and the consolidated results of its operations and cash flows for the
      periods then ended (subject, in the case of unaudited statements, to normal
      and
      recurring year-end audit adjustments). All
      material agreements that were required to be filed as exhibits to the SEC
      Documents under Item 601 of Regulation S-K (collectively, the “Material
      Agreements”)
      to
      which the Company or any Subsidiary of the Company is a party, or the property
      or assets of the Company or any Subsidiary of the Company are subject, have
      been
      filed as exhibits to the SEC Documents. To the Company’s knowledge, all Material
      Agreements are valid and enforceable against
      the Company in accordance with their respective terms, except (i) as
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization or moratorium or similar laws affecting creditors’ and
      contracting parties’ rights generally, and (ii) as enforceability may be subject
      to general principles of equity and except as rights to indemnity and
      contribution may be limited by state or federal securities laws or public policy
      underlying such laws. The Company is not in breach of or default under any
      of
      the Material Agreements, and to the Company's knowledge, no other party to
      a
      Material Agreement is in breach of or default under such Material Agreement,
      except in each case, for such breaches or defaults as would not reasonably
      be
      expected to have a Material Adverse Effect. The Company has not received a
      notice of termination of any of the Material Agreements.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    2.7 Disclosure
      Controls and Procedures.
      Except
      as disclosed in the SEC Documents, the Company has established and maintains
      disclosure controls and procedures (as defined in Exchange Act Rules
      13a-15(e) and 15d-15(e)) that are effective in all material respects to ensure
      that material information relating to the Company, including any consolidated
      Subsidiaries, that is required to be disclosed by the Company in the reports
      that it files or submits under the Exchange Act is made known to its chief
      executive officer and chief financial officer by others within those entities.
      The Company’s certifying officers have evaluated the effectiveness of the
      Company’s controls and procedures as of the end of the period covered by the
      most recently filed quarterly or annual periodic report under the Exchange
      Act
      (such date, the “Evaluation
      Date”).
      The
      Company presented in its most recently filed quarterly or annual periodic report
      under the Exchange Act the conclusions of the certifying officers about the
      effectiveness of the disclosure controls and procedures based on their
      evaluations as of the Evaluation Date. Since the Evaluation Date, there have
      been no significant changes in the Company’s internal control over financial
      reporting identified in connection with such evaluation that occurred during
      the
      Company’s last fiscal quarter that has materially affected, or is reasonably
      likely to materially affect, the Company’s internal control over financial
      reporting. 

     

    2.8 Accounting
      Controls.
      Except
      as disclosed in the SEC Documents, the Company maintains a system of accounting
      controls sufficient to provide reasonable assurances that (i) transactions
      are executed in accordance with management’s general or specific authorization,
      (ii) transactions are recorded as necessary to permit preparation of
      financial statements in conformity with generally accepted accounting principles
      as applied in the United States and to maintain accountability for assets,
      (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorization, and (iv) the recorded accountability for assets is
      compared with existing assets at reasonable intervals and appropriate action
      is
      taken with respect to any differences.

     

    2.9 Absence
      of Litigation.
      As of
      the date hereof, there is no action, suit, proceeding or investigation before
      or
      by any court, public board, government agency, self-regulatory organization
      or
      body pending or, to the Company’s knowledge, threatened against the Company that
      if determined adversely to the Company would reasonably be expected to have
      a
      Material Adverse Effect. To the knowledge of the Company, there has not been
      and
      there is not pending any investigation by the SEC involving the Company or
      any
      current or former director or officer of the Company. The Company has not
      received any stop order or other order suspending the effectiveness of any
      registration statement filed by the Company under the Exchange Act or the
      Securities Act and, to the Company’s knowledge, the SEC has not issued any such
      order.

     

    2.10 Intellectual
      Property Rights.
      To the
      Company’s knowledge, the Company owns or possesses, or believes it can obtain on
      reasonable terms, licenses or sufficient rights to use all patents, patent
      applications, patent rights, inventions, know-how, trade secrets, trademarks,
      trademark applications, service marks, service names, trade names and copyrights
      necessary to enable it to conduct its business in all material respects as
      conducted as of the date hereof (the “Intellectual
      Property”),
      except
      for such Intellectual Property, the inability to use would not have a Material
      Adverse Effect. To the Company’s knowledge, the Company has not infringed the
      intellectual property rights of third parties and no third party, to the
      Company’s knowledge, is infringing the Intellectual Property, in each case,
      which could reasonably be expected to result in a Material Adverse Effect.
      Except as disclosed in the SEC Documents, there are no material options,
      licenses or agreements relating to the Intellectual Property, nor is the Company
      bound by or a party to any material options, licenses or agreements relating
      to
      the patents, patent applications, patent rights, inventions, know-how, trade
      secrets, trademarks, trademark applications, service marks, service names,
      trade
      names or copyrights of any other person or entity. As of the date hereof, there
      is no material claim or action or proceeding pending or, to the Company’s
      knowledge, threatened that challenges the right of the Company with respect
      to
      any Intellectual Property.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    2.11 Placement
      Agent.
      The
      Company has taken no action that would give rise to any claim by any person
      for
      brokerage commissions, placement agent’s fees or similar payments relating to
      this Agreement or the transactions contemplated hereby, except for dealings
      with
      the Placement Agent, whose commissions and fees will be paid by the
      Company.

     

    2.12 Investment
      Company.
      The
      Company is not and, after giving effect to the offering and sale of the
      Securities, will not be an “investment company” as such term is defined in the
      Investment Company Act of 1940, as amended (the “Investment
      Company Act”).
      The
      Company shall conduct its business in a manner so that it will not become
      subject to the Investment Company Act.

     

    2.13 No
      Material
      Adverse Change.
      Since
      September 30, 2005, except as described or referred to in the SEC Documents
      and
      except for cash expenditures in the ordinary course of business, there has
      not
      been any Material Adverse Effect. Since September 30, 2005, (i) there has not
      been any dividend or distribution of any kind declared, set aside for payment,
      paid or made by the Company on any class of capital stock, (ii) the Company
      has
      not sustained any material loss or interference with the Company’s business from
      fire, explosion, flood or other calamity, whether or not covered by insurance,
      or from any labor disturbance or dispute or any action, order or decree of
      any
      court or arbitrator or governmental or regulatory authority, and (iii) the
      Company has not incurred any material liabilities except in the ordinary course
      of business and except for liabilities arising from or in connection with this
      Agreement and the Warrants.

     

    2.14 Nasdaq
      National Market.
      The
      issued and outstanding shares of Common Stock are listed on Nasdaq, and, to
      the
      Company’s knowledge, there are no proceedings to revoke or suspend such listing.
      The Company is in compliance in all material respects with the requirements
      of
      Nasdaq for continued listing of the Common Stock thereon and any other Nasdaq
      listing and maintenance requirements. 

     

    2.15 Acknowledgment
      Regarding Purchasers’ Purchase of Securities. The
      Company acknowledges and agrees that each of the Purchasers is acting solely
      in
      the capacity of an arm’s length purchaser with respect to this Agreement and the
      transactions contemplated hereby. The Company further acknowledges that no
      Purchaser is acting as a financial advisor or fiduciary of the Company (or
      in
      any similar capacity with respect to the Company) with respect to this Agreement
      and the transactions contemplated hereby and any advice given by any Purchaser
      or any of their respective representatives or agents to the Company in
      connection with this Agreement and the transactions contemplated hereby is
      merely incidental to such Purchaser’s purchase of the Securities. The Company
      further represents to each Purchaser that the Company’s decision to enter into
      this Agreement has been based on the independent evaluation of the transactions
      contemplated hereby by the Company and its representatives.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    2.16 Accountants.
      Goldstein
      Golub Kessler LLP,
      who
      will express their opinion with respect to the audited financial statements
      and
      schedules to be included as a part of the Registration Statement prior to the
      filing of the Registration Statement, are independent accountants as required
      by
      the Securities Act.

     

    2.17 Insurance.
      The
      Company is insured by insurers of recognized financial responsibility against
      such losses and risks and in such amounts as the Company believes are prudent
      and customary for a company (i) in the businesses and location in which the
      Company is engaged, (ii) with the resources of the Company and (iii) at a
      similar stage of development as the Company. The Company has not received any
      written notice that the Company will not be able to renew its existing insurance
      coverage as and when such coverage expires. The Company believes it will be
      able
      to obtain similar coverage at reasonable cost from similar insurers as may
      be
      necessary to continue its business.

     

    2.18 Foreign
      Corrupt Practices.
      Since
      January 1, 2005, neither the Company, nor to the Company’s knowledge, any
      director, officer, agent, employee or other person acting on behalf of the
      Company has, in the course of its actions for, or on behalf of, the Company
      (i) used any corporate funds for any unlawful contribution, gift,
      entertainment or other unlawful expenses relating to political activity; (ii)
      made any direct or indirect unlawful payment to any foreign or domestic
      government official or employee from corporate funds; (iii) violated or is
      in violation of in any material respect any provision of the U.S. Foreign
      Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe,
      rebate, payoff, influence payment, kickback or other unlawful payment to any
      foreign or domestic government official or employee.

     

    2.19 Private
      Placement.
      Neither
      the Company nor any of its Subsidiaries, nor any person acting on its or their
      behalf, has, directly or indirectly, made any offers or sales of any security
      or
      solicited any offers to buy any security, under any circumstances that would
      require registration of the Securities under the Securities Act.

     

    2.20 No
      Registration Rights.
      No
      person has the right to (i) prohibit the Company from filing the Registration
      Statement or (ii) other than as disclosed in the SEC Documents, require the
      Company to register any securities for sale under the Securities Act by reason
      of the filing of the Registration Statement. The granting and performance of
      the
      registration rights under this Agreement will not violate or conflict with,
      or
      result in a breach of any provision of, or constitute a default under, any
      agreement, indenture or instrument to which the Company is a party.

     

    2.21 Taxes.
      The
      Company has filed (or has obtained an extension of time within which to file)
      all necessary federal, state and foreign income and franchise tax returns and
      has paid all taxes shown as due on such tax returns, except where the failure
      to
      so file or the failure to so pay would not reasonably be expected to have a
      Material Adverse Effect.

     

    2.22 Real
      and Personal Property. The
      Company has good and marketable title to, or has valid rights to lease or
      otherwise use, all items of real and personal property that are material to
      the
      business of the Company free and clear of all liens, encumbrances, claims and
      defects and imperfections of title except those that (i) do not materially
      interfere with the use of such property by the Company or (ii) would not
      reasonably be expected to have a Material Adverse Effect.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

     

    2.23 Application
      of Takeover Protections.
      The
      execution and delivery of this Agreement and the consummation of the
      transactions contemplated hereby will not impose any restriction on any
      Purchaser, or create in any party (including any current stockholder of the
      Company) any rights, under any share acquisition, business combination, poison
      pill (including any distribution under a rights agreement), or other similar
      anti-takeover provisions under the Company’s charter documents or the laws of
      its state of incorporation.

     

    2.24 No
      Manipulation of Stock. The
      Company has not taken, nor will it take, directly or indirectly any action
      designed to stabilize or manipulate of the price of the Common Stock or any
      security of the Company to facilitate the sale or resale of any of the
      Shares.

     

    2.25 Related
      Party Transactions.
      Since
      September 30, 2005, except with respect to the transactions (i) that are not
      required to be disclosed and (ii) contemplated hereby to the extent an affiliate
      of any director purchases Securities hereunder, all transactions that have
      occurred between or among the Company, on the one hand, and any of its officers
      or directors, or any affiliate or affiliates of any such officer or director,
      on
      the other hand, prior to the date hereof have been disclosed in the SEC
      Documents.

     

    ARTICLE
      3

     

    PURCHASER’S
      REPRESENTATIONS AND WARRANTIES

     

    Each
      Purchaser represents and warrants to the Company, severally and not jointly,
      with respect to itself and its purchase hereunder, that:

    

    3.1 Investment
      Purpose; Status. The
      Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of
      the Securities Act. The Purchaser is purchasing the Securities for its own
      account and not with a present view toward the public sale or distribution
      thereof and has no intention of selling or distributing any of such Securities
      or any arrangement or understanding with any other persons regarding the sale
      or
      distribution of such Securities except in accordance with the provisions of
      Article 6 and except as would not result in a violation of the Securities Act;
      provided,
      however,
      that by
      making the representations herein, such Purchaser does not agree to hold any
      of
      the Securities for any minimum or other specific term and reserves the right
      to
      dispose of the Securities at any time in accordance with or pursuant to a
      registration statement or an exemption under the Securities Act. The Purchaser
      will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
      dispose of (or solicit any offers to buy, purchase or otherwise acquire or
      take
      a pledge of) any of the Securities except in accordance with the provisions
      of
      Article 6 or pursuant to and in accordance with the Securities Act.

     

    3.2 Questionnaire.
      The
      Investor Questionnaire (the “Investor
      Questionnaire”)
      submitted by Purchaser to the Company in connection with its purchase of the
      Securities was accurate and correct when delivered and is accurate and correct
      as of the date hereof. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

     

    3.3 Reliance
      on Exemptions.
      The
      Purchaser understands that the Securities are being offered and sold to it
      in
      reliance upon specific exemptions from the registration requirements of United
      States federal and state securities laws and that the Company is relying upon
      the truth and accuracy of, and the Purchaser’s compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      the Purchaser set forth herein in order to determine the availability of such
      exemptions and the eligibility of the Purchaser to acquire the
      Securities.

     

    3.4 Acknowledgement
      of Risk. 

     

    (a) The
      Purchaser acknowledges and understands that its investment in the Securities
      involves a significant degree of risk, including, without limitation,
      (i) the Company remains a development stage business with limited operating
      history and requires substantial funds in addition to the proceeds from the
      sale
      of the Securities; (ii) an investment in the Company is speculative, and
      only Purchasers who can afford the loss of their entire investment should
      consider investing in the Company and the Securities; (iii) the Purchaser
      may not be able to liquidate its investment; (iv) transferability of the
      Securities is extremely limited; (v) in the event of a disposition of the
      Securities, the Purchaser could sustain the loss of its entire investment;
      and
      (vi) the Company has not paid any dividends on its Common Stock since January
      1,
      2001, and does not anticipate the payment of dividends in the foreseeable
      future. Such risks are more fully set forth in the SEC Documents;

     

    (b) The
      Purchaser is able to bear the economic risk of holding
      the Securities for an indefinite period, and has knowledge and experience in
      financial and business matters such that it is capable of evaluating the risks
      of the investment in the Securities; and

     

    (c) The
      Purchaser has, in connection with the Purchaser’s decision to purchase
      Securities, not relied upon any representations or other information (whether
      oral or written) other than as set forth in the representations
      and warranties of the Company contained herein, and the Purchaser has, with
      respect to all matters relating to this Agreement and the offer and sale of
      the
      Securities, relied solely upon the advice of such Purchaser’s own counsel and
      has not relied upon or consulted any counsel to the Placement Agent or counsel
      to the Company.

     

    3.5 Governmental
      Review.
      The
      Purchaser understands that no United States federal or state agency or any
      other
      government or governmental agency has passed upon or made any recommendation
      or
      endorsement of the Securities or an investment therein.

     

    3.6 Transfer
      or Resale.
      The
      Purchaser understands that:

     

    (a) the
      Securities have not been and are not being registered under the Securities
      Act
      (other than as contemplated in Article 6) or any applicable state securities
      laws and, consequently, the Purchaser may have to bear the risk of owning the
      Securities for an indefinite period of time because the Securities may not
      be
      transferred unless (i) the resale of the Securities is registered pursuant
      to an
      effective registration statement under the Securities Act, as contemplated
      in
      Article 6; (ii) the Purchaser has delivered to the Company an opinion of counsel
      (in form, substance and scope reasonably acceptable to the Company) to the
      effect that the Securities to be sold or transferred may be sold or transferred
      pursuant to an exemption from such registration; or (iii) the Securities
      are sold or transferred pursuant to Rule 144;

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

     

    (b) any
      sale
      of the Securities made in reliance on Rule 144 may be made only in accordance
      with the terms of Rule 144 and, if Rule 144 is not applicable, any resale of
      the
      Securities under circumstances in which the seller (or the person through whom
      the sale is made) may be deemed to be an underwriter (as that term is defined
      in
      the Securities Act) may require compliance with some other exemption under
      the
      Securities Act or the rules and regulations of the SEC thereunder; and

     

    (c) except
      as
      set forth in Article 6, neither the Company nor any other person is under any
      obligation to register the resale of the Shares or the Warrant Shares under
      the
      Securities Act or any state securities laws or to comply with the terms and
      conditions of any exemption thereunder. 

     

    3.7 Legends. 

     

    (a) The
      Purchaser understands the certificates representing the Securities will bear
      a
      restrictive legend in substantially the following form (and a stop-transfer
      order may be placed against transfer of the certificates for such
      Securities):

     

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

    

    (b) The
      Purchaser may request that the Company remove, and the Company agrees to
      authorize the removal of any legend from the Shares and Warrant Shares following
      any sale of the Shares or Warrant Shares pursuant to an effective Registration
      Statement or Rule 144 or when the Shares or Warrant Shares may be sold under
      Rule 144(k).

     

    3.8 Authorization;
      Enforcement.
      The
      Purchaser is duly organized, validly existing and in good standing under the
      laws of its jurisdiction of formation, and has the requisite power and authority
      to enter into this Agreement and to consummate the transactions contemplated
      hereby. The Purchaser has taken all necessary action to authorize the execution,
      delivery and performance of this Agreement. Upon the execution and delivery
      of
      this Agreement, this Agreement shall constitute a valid and binding obligation
      of the Purchaser enforceable in accordance with its terms, except as
      enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting creditors’ and contracting
      parties’ rights generally and except as enforceability may be subject to general
      principles of equity and except as rights to indemnity and contribution may
      be
      limited by state or federal securities laws or public policy underlying such
      laws.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

     

    3.9 Residency.
      The
      Purchaser is a resident of the jurisdiction set forth immediately below such
      Purchaser’s name on the signature pages hereto.

     

    3.10 No
      Short Sales.
      Between
      the time the Purchaser learned about the Offering and the public announcement
      of
      the Offering, the Purchaser has not engaged in any short sales or similar
      transactions with respect to the Common Stock, nor has the Purchaser, directly
      or indirectly, knowingly caused any Person to engage in any short sales or
      similar transactions with respect to the Common Stock.

     

    3.11 Acknowledgements
      Regarding Placement Agent. The
      Purchaser acknowledges that the Placement Agent is acting as the exclusive
      placement agent on a “best efforts” basis for the Securities being offered
      hereby and will be compensated by the Company for acting in such capacity.
      The
      Purchaser represents that (i) the Purchaser was contacted regarding the sale
      of
      the Securities by the Placement Agent (or an authorized agent or representative
      thereof) with whom the Purchaser entered into a confidentiality agreement and
      (ii) no Securities were offered or sold to it by means of any form of general
      solicitation or general advertising.

     

    ARTICLE
      4

     

    COVENANTS

     

    4.1 Reporting
      Status.
      The
      Company’s Common Stock is registered under Section 12 of the Exchange Act.
      During the Registration Period, the Company agrees to use commercially
      reasonable efforts to timely file with the SEC all reports required to be filed
      by the Company under the Exchange Act, and the Company will not terminate its
      status as an issuer required to file reports under the Exchange Act even if
      the
      Exchange Act or the rules and regulations thereunder would permit such
      termination.

     

    4.2 Expenses.
      The
      Company and each Purchaser is liable for, and each will pay, its own expenses
      incurred in connection with the negotiation, preparation, execution and delivery
      of this Agreement, including, without limitation, attorneys’ and consultants’
fees and expenses.

     

    4.3 Financial
      Information.
      The
      Company will use commercially reasonable efforts to cause the financial
      statements of the Company included in any documents filed with the SEC (i)
      to be
      prepared in accordance with accounting principles generally accepted in the
      United States, consistently applied (except (x) as may be otherwise indicated
      in
      such financial statements or the notes thereto, or (y) in the case of unaudited
      interim statements, to the extent they may not include footnotes, may be
      condensed or summary statements or may conform to the SEC’s rules and
      instructions for Reports on Form 10-Q), and (ii) to fairly present in all
      material respects the consolidated financial position of the Company and
      consolidated results of its operations and cash flows as of, and for the periods
      covered by, such financial statements (subject, in the case of unaudited
      statements, to normal and recurring year-end audit adjustments).

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

     

    4.4 Securities
      Laws Disclosure; Publicity. On
      or
      before 9:30 a.m., New York local time, on March 13, 2006 the Company shall
      issue
      a press release announcing the signing of this Agreement and describing the
      material terms of the transactions contemplated by this Agreement. On or before
      the fourth business day following the Closing, the Company shall file a Current
      Report on Form 8-K with the SEC describing the terms of the transactions
      contemplated by this Agreement and including as an exhibit to such Current
      Report on Form 8-K this Agreement, in the form required by the Exchange Act.
      The
      Company shall not otherwise publicly disclose the name of any Purchaser, or
      include the name of any Purchaser in any filing with the Commission (other
      than
      the Registration Statement and any exhibits to filings made in respect of this
      transaction in accordance with periodic filing requirements under the Exchange
      Act) or any regulatory agency, without the prior written consent of such
      Purchaser, except to the extent such disclosure is required by law, regulations
      or the rules of any securities exchange, in which case the Company shall provide
      the Purchasers with prior notice of such disclosure.

     

    4.5 Sales
      by Purchasers.
      Each
      Purchaser will sell any Securities and Warrant Shares held by it in compliance
      with applicable prospectus delivery requirements, if any, or otherwise in
      compliance with the requirements for an exemption from registration under the
      Securities Act and the rules and regulations promulgated thereunder. No
      Purchaser will make any sale, transfer or other disposition of the Securities
      in
      violation of federal or state securities laws. 

     

    4.6 Reservation
      of Common Stock.
      The
      Company shall reserve and keep available at all times during which the Warrants
      remain exercisable, free of preemptive rights, a sufficient number of shares
      of
      Common Stock for the purpose of enabling the Company to issue Warrant Shares
      pursuant to this Agreement. 

     

    ARTICLE
      5

     

    CONDITIONS
      TO CLOSING

     

    5.1 Conditions
      to Obligations of the Company.
      The
      Company’s obligation to complete the purchase and sale of the Securities and
      deliver such stock certificate(s) and Warrants to each Purchaser is subject
      to
      the fulfillment or waiver as of the Closing Date of the following
      conditions:

     

    (a) Receipt
      of Funds.
      The
      Company shall have received immediately available funds in the full amount
      of
      the purchase price for the Securities being purchased hereunder as set forth
      opposite such Purchaser’s name on Exhibit
      A hereto.

     

    (b) Representations
      and Warranties.
      The
      representations and warranties made by each Purchaser in Article 3 which
      are
      qualified as to materiality must be true and correct as written and the
      representations and warranties of each Purchaser contained in this Agreement
      which are not qualified as to materiality must be true and correct in all
      material respects as of the Closing Date except to the extent that the
      representations and warranties relate to an earlier date in which case the
      representations and warranties must be true and correct as written or true
      and
      correct in all material respects, as the case may be, as of the earlier
      date.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

     

    (c) Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Purchasers on or prior to the Closing Date shall have been performed
      or
      complied with in all material respects. 

     

    (d) Blue
      Sky.
      The
      Company shall have obtained all necessary blue sky law permits and
      qualifications, or secured exemptions therefrom, required by any state for
      the
      offer and sale of the Securities. 

     

    (e) Nasdaq
      Qualification.
      The
      Shares to be issued shall be duly authorized for listing by Nasdaq, subject
      to
      official notice of issuance, to the extent required by the rules of Nasdaq.
      

     

    (f) Absence
      of Litigation.
      No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted or be pending before any court, arbitrator, governmental
      body, agency or official. 

     

    (g) No
      Governmental Prohibition.
      The
      sale of the Securities by the Company shall not be prohibited by any law or
      governmental order or regulation.

     

    (h) Minimum
      Aggregate Investment.
      The
      Company shall have received at the Closing at least $20.0 million of aggregate
      proceeds from the sale of Securities hereunder.

     

    5.2 Conditions
      to Purchasers’ Obligations at the Closing.
      Each
      Purchaser’s obligation to complete the purchase and sale of the Securities is
      subject to the fulfillment or waiver as of the Closing Date of the following
      conditions:

     

    (a) Representations
      and Warranties.
      The
      representations and warranties made by the Company in Article 2 which
      are
      qualified as to materiality must be true and correct as written and the
      representations and warranties of the Company contained in this Agreement which
      are not qualified as to materiality must be true and correct in all material
      respects as of the Closing Date except to the extent that the representations
      and warranties relate to an earlier date in which case the representations
      and
      warranties must be true and correct as written or true and correct in all
      material respects, as the case may be, as of the earlier date.

     

    (b) Covenants.
      All
      covenants, agreements and conditions contained in this Agreement to be performed
      by the Company on or prior to the Closing Date shall have been performed or
      complied with in all material respects. 

     

    (c) Blue
      Sky.
      The
      Company shall have obtained all necessary blue sky law permits and
      qualifications, or secured exemptions therefrom, required by any state or
      foreign or other jurisdiction for the offer and sale of the Shares.

     

    (d) Legal
      Opinion.
      The
      Company shall have delivered to such Purchaser an opinion, dated as of the
      Closing Date, from Kaye Scholer LLP, counsel to the Company, in substantially
      the form attached hereto as Exhibit
      C hereto.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

     

    (e) Transfer
      Agent Instructions.
      The
      Company shall have delivered to its transfer agent irrevocable instructions
      to
      issue to such Purchaser or in such nominee name(s) as designated by such
      Purchaser in writing such number of Shares set forth opposite such Purchaser’s
      name on Exhibit
      A
      hereto
      or, if requested by the Purchaser, one or more certificates representing such
      Shares.

     

    (f) Nasdaq
      Qualification.
      The
      Shares shall be duly authorized for listing by Nasdaq, subject to official
      notice of issuance, to the extent required by the rules of Nasdaq. 

     

    (g) Absence
      of Litigation.
      No
      proceeding challenging this Agreement or the transactions contemplated hereby,
      or seeking to prohibit, alter, prevent or materially delay the Closing, shall
      have been instituted or be pending before any court, arbitrator, governmental
      body, agency or official. 

     

    (h) No
      Governmental Prohibition.
      The
      sale of the Shares by the Company shall not be prohibited by any law or
      governmental order or regulation.

     

    ARTICLE
      6

     

    REGISTRATION
      RIGHTS

     

    6.1 The
      Company shall use commercially reasonable efforts to file, as soon as reasonably
      practicable, but in no event later than 30 days
      after the Closing Date (the “Filing
      Date”),
      a
      registration statement (the “Registration
      Statement”)
      with
      the SEC covering the resale of the Registrable Securities, and effect the
      registration, qualifications or compliances (including, without limitation,
      the
      execution of any required undertaking to file post-effective amendments,
      appropriate qualifications or exemptions under applicable blue sky or other
      state securities laws and appropriate compliance with applicable securities
      laws, requirements or regulations) of the Shares and the Warrant Shares as
      promptly as possible after the filing thereof, but in any event prior to the
      date which is 120 days after the Closing Date. The Registration Statement will
      be on Form S-3; provided,
      that if
      Form S-3 is not available for use by the Company on the Filing Date, then the
      Registration Statement will be on such form as is then available.

     

    6.2 All
      Registration Expenses incurred in connection with any registration,
      qualification, exemption or compliance pursuant to Section 6.1 shall be borne
      by
      the Company. All Selling Expenses relating to the sale of securities registered
      by or on behalf of Holders shall be borne by such Holders pro rata on the basis
      of the number of securities so registered.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

     

    6.3 The
      Company further agrees that, in the event that the Registration Statement (i)
      has not been filed with the SEC within 30 days after the Closing Date, (ii)
      has
      not been declared effective by the SEC within 120 days after the Closing Date,
      or (iii) after the Registration Statement is declared effective by the SEC,
      is
      suspended by the Company or ceases to remain continuously effective during
      the
      Registration Period as to all Registrable Securities for which it is required
      to
      be effective, other than, in each case, within the time period(s) permitted
      by
      Section 6.7(b) (each such event referred to in clauses (i), (ii) and (iii),
      (a
“Registration
      Default”)),
      for
      all or part of any thirty-day period (a “Penalty
      Period”)
      during
      which the Registration Default remains uncured (which initial thirty-day period
      shall commence on the fifth Business Day after the date of such Registration
      Default if such Registration Default has not been cured by such date), the
      Company shall pay to each Purchaser 1% of such Purchaser’s aggregate purchase
      price of his or her Securities for each Penalty Period during which the
      Registration Default remains uncured; provided,
      however,
      that if
      a Purchaser fails to provide the Company with any information that is required
      to be provided in the Registration Statement with respect to such Purchaser
      as
      set forth herein, then the commencement of the Penalty Period described above
      shall be extended until two Business Days following the date of receipt by
      the
      Company of such required information; and
      provided, further,
      that in
      no event shall the Company be required hereunder to pay to any Purchaser
      pursuant to this Agreement an aggregate amount that exceeds 6.0% of the
      aggregate Purchase Price paid by such Purchaser for such Purchaser’s Securities.
      The Company shall deliver said cash payment to the Purchaser by the fifth
      Business Day after the end of such Penalty Period. If the Company fails to
      pay
      said cash payment to the Purchasers in full by the fifth Business Day after
      the
      end of such Penalty Period, the Company will pay interest thereon at a rate
      of
      10.0% per annum (or such lesser maximum amount that is permitted to be paid
      by
      applicable law) to the Purchasers, accruing daily from the date such liquidated
      damages are due until such amounts, plus all such interest thereon, are paid
      in
      full. For
      the
      avoidance of doubt, the parties hereto agree that the payments set forth in
      this
      Section 6.3 relate solely to the Shares to be issued under this Agreement and
      not to the Warrants or Warrant Shares issuable hereunder, in respect of which
      no
      damages under this Section 6.3 will be payable by the Company. The provisions
      of
      this Section 6.3 are the Purchasers’ exclusive remedy for any Registration
      Default.

     

    6.4 In
      the
      case of the registration, qualification, exemption or compliance effected by
      the
      Company pursuant to this Agreement, the Company shall, upon reasonable request,
      inform each Holder as to the status of such registration, qualification,
      exemption and compliance. At its expense, during the Registration Period, the
      Company shall: 

     

    (a) except
      for such times as the Company is permitted hereunder to suspend the use of
      the
      prospectus forming part of the Registration Statement, use commercially
      reasonable efforts to keep such registration, and any qualification, exemption
      or compliance under state securities laws which the Company determines to
      obtain, continuously effective with respect to a Holder, and to keep such
      Registration Statement free of any material misstatements or omissions, until
      the earlier of the following: (i) the second anniversary of the Closing Date
      or
      (ii) the date all Shares and Warrant Shares held by such Holder may be sold
      under Rule 144 during any 90 day period. The period of time during which the
      Company is required hereunder to keep the Registration Statement effective
      is
      referred to herein as the “Registration
      Period.”

     

    (b) advise
      the Holders within five Business Days:

     

    (i) when
      the
      Registration Statement or any amendment thereto has been filed with the SEC
      and
      when the Registration Statement or any post-effective amendment thereto has
      become effective;

     

    (ii) of
      any
      request by the SEC for amendments or supplements to the Registration Statement
      or the prospectus included therein;

     

    
      
        
        

      

      
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    (iii) of
      the
      issuance by the SEC of any stop order suspending the effectiveness of the
      Registration Statement or the initiation of any proceedings for such
      purpose;

     

    (iv) of
      the
      receipt by the Company of any notification with respect to the suspension of
      the
      qualification of the Registrable Securities included therein for sale in any
      jurisdiction or the initiation or threatening of any proceeding for such
      purpose; and

     

    (v) of
      the
      occurrence of any event that requires the making of any changes in the
      Registration Statement or the prospectus so that, as of such date, the
      Registration Statement and the prospectus, as applicable, do not contain an
      untrue statement of material fact, and do not omit to state a material fact
      required to be stated therein or necessary to make the statements therein (in
      the case of the prospectus, in the light of the circumstances under which they
      were made) not misleading;

     

    (c) use
      commercially reasonable efforts to obtain the withdrawal of any order suspending
      the effectiveness of any Registration Statement as soon as reasonably
      practicable;

     

    (d) if
      a
      Holder so requests in writing, promptly furnish to each such Holder, without
      charge, at least one copy of such Registration Statement and any post-effective
      amendment thereto, including financial statements and schedules, and, if
      explicitly requested, all exhibits in the form filed with the SEC (other than
      those exhibits available via EDGAR);

     

    (e) during
      the Registration Period, promptly deliver to each such Holder, without charge,
      as many copies of the prospectus included in such Registration Statement and
      any
      amendment or supplement thereto as such Holder may reasonably request in
      writing; and the Company consents to the use, consistent with the provisions
      hereof, of the prospectus or any amendment or supplement thereto by each of
      the
      selling Holders of Registrable Securities in connection with the offering and
      sale of the Registrable Securities covered by the prospectus or any amendment
      or
      supplement thereto;

     

    (f) during
      the Registration Period, if a Holder so requests in writing, deliver to each
      Holder, without charge, (i) one copy of the following documents, other than
      those documents available via EDGAR: (A) its annual report to its stockholders,
      if any (which annual report shall contain financial statements audited in
      accordance with generally accepted accounting principles in the United States
      of
      America by an independent registered public accounting firm of recognized
      standing), (B) if not included in substance in its annual report to
      stockholders, its annual report on Form 10-K (or similar form), (C) its
      definitive proxy statement with respect to its annual meeting of stockholders,
      (D) each of its quarterly report(s) on Form 10-Q (or similar form), and (E)
      a
      copy of the full Registration Statement (the foregoing, in each case, excluding
      exhibits); and (ii) if explicitly requested, all exhibits excluded by the
      parenthetical to the immediately preceding clause (E);

     

    (g) prior
      to
      any public offering of Registrable Securities pursuant to any Registration
      Statement, promptly take such actions as may be necessary to register or qualify
      or obtain an exemption for offer and sale under the securities or blue sky
      laws
      of such United States jurisdictions as any such Holders reasonably request
      in
      writing, provided that the Company shall not for any such purpose be required
      to
      qualify generally to transact business as a foreign corporation in any
      jurisdiction where it is not so qualified or to consent to general service
      of
      process in any such jurisdiction, and do any and all other acts or things
      reasonably necessary or advisable to enable the offer and sale in such
      jurisdictions of the Registrable Securities covered by such Registration
      Statement;

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

     

    (h) 
      upon the
      occurrence of any event contemplated by Section 6.4(b)(v) above, except for
      such
      times as the Company is permitted hereunder to suspend the use of the prospectus
      forming part of the Registration Statement, the Company shall use commercially
      reasonable efforts to as soon as reasonably practicable prepare a post-effective
      amendment to the Registration Statement or a supplement to the related
      prospectus, or file any other required document so that, as thereafter delivered
      to purchasers of the Registrable Securities included therein, the prospectus
      will not include any untrue statement of a material fact or omit to state any
      material fact necessary to make the statements therein, in the light of the
      circumstances under which they were made, not misleading;

     

    (i) otherwise
      use commercially reasonable efforts to comply in all material respects with
      all
      applicable rules and regulations of the SEC which could affect the sale of
      the
      Registrable Securities;

     

    (j) use
      commercially reasonable efforts to cause all Registrable Securities to be listed
      on each securities exchange or market, if any, on which equity securities issued
      by the Company have been listed; 

     

    (k) use
      commercially reasonable efforts to take all other steps necessary to effect
      the
      registration of the Registrable Securities contemplated hereby and to enable
      the
      Holders to sell Registrable Securities under Rule 144; and

     

    (l) if
      a
      Holder so requests in writing, permit a single counsel for the Purchasers
      designated by Holders of a majority of the Registrable Securities to review
      the
      Registration Statement and all amendments and supplements thereto, within two
      Business Days prior to the filing thereof with the Commission;

     

    provided
      that, in
      the case of clause (l) above, the Company shall not be required (A) to delay
      the
      filing of the Registration Statement or any amendment or supplement thereto
      to
      incorporate any comments to the Registration Statement or any amendment or
      supplement thereto by or on behalf of a Holder if such comments would require
      or
      result in a delay in the filing of such Registration Statement, amendment or
      supplement, as the case may be, or (B) to provide, and shall not provide, any
      Purchaser or its representatives with material, non-public information unless
      such Purchaser agrees to receive such information and enters into a written
      confidentiality agreement with the Company in a form reasonably acceptable
      to
      the Company.

     

    6.5 The
      Holders shall have no right to take any action to restrain, enjoin or otherwise
      delay any registration pursuant to Section 6.1 hereof as a result of any
      controversy that may arise with respect to the interpretation or implementation
      of this Agreement.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

     

    6.6 i)
      To the
      extent permitted by law, the Company shall indemnify each Holder and each person
      controlling such Holder within the meaning of Section 15 of the Securities
      Act,
      with respect to which any registration that has been effected pursuant to this
      Agreement, against all claims, losses, damages and liabilities (or action in
      respect thereof), including any of the foregoing incurred in settlement of
      any
      litigation, commenced or threatened (subject to Section 6.6(c) below), arising
      out of or based on any untrue statement (or alleged untrue statement) of a
      material fact contained in the Registration Statement, prospectus or any
      amendment or supplement thereof, or based on any omission (or alleged omission)
      to state therein a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading (in case of any prospectus, in light
      of the circumstances in which they were made), or any violation by the Company
      of any rule or regulation promulgated under the Securities Act applicable to
      the
      Company and relating to any action or inaction required of the Company in
      connection with any such registration, qualification or compliance, and will
      reimburse each Holder and each person controlling such Holder, for reasonable
      legal and other out-of-pocket expenses reasonably incurred in connection with
      investigating or defending any such claim, loss, damage, liability or action
      as
      incurred; provided that the Company will not be liable in any such case to
      the
      extent that any untrue statement or omission or allegation thereof is made
      in
      reliance upon and in conformity with written information furnished to the
      Company by or on behalf of such Holder specifically for use in preparation
      of
      such Registration Statement, prospectus, amendment or supplement; provided
      further
      that the
      Company will not be liable in any such case where the claim, loss, damage or
      liability arises out of or is related to the failure of such Holder to comply
      with the covenants and agreements contained in this Agreement respecting sales
      of Registrable Securities, and except that the foregoing indemnity agreement
      is
      subject to the condition that, insofar as it relates to any such untrue
      statement or alleged untrue statement or omission or alleged omission made
      in
      the preliminary prospectus but eliminated or remedied in the amended prospectus
      on file with the SEC at the time the Registration Statement becomes effective
      or
      in the amended prospectus filed with the SEC pursuant to Rule 424(b) or in
      the
      prospectus subject to completion under Rule 424 of the Securities Act, which
      together meet the requirements of Section 10(a) of the Securities Act (the
      “Final
      Prospectus”),
      such
      indemnity shall not inure to the benefit of any such Holder or any such
      controlling person, if a copy of the Final Prospectus furnished by the Company
      to the Holder for delivery was not furnished to the person or entity asserting
      the loss, liability, claim or damage at or prior to the time such furnishing
      is
      required by the Securities Act and the Final Prospectus would have cured the
      defect giving rise to such loss, liability, claim or damage.

     

    (b) Each
      Holder will severally, and not jointly, indemnify the Company, each of its
      directors and officers, and each person who controls the Company within the
      meaning of Section 15 of the Securities Act, against all claims, losses,
      damages and liabilities (or actions in respect thereof), including any of the
      foregoing incurred in settlement of any litigation, commenced or threatened
      (subject to Section 6.6(c) below), arising out of or based on any untrue
      statement (or alleged untrue statement) of a material fact contained in the
      Registration Statement, prospectus, or any amendment or supplement thereof,
      or
      based on any omission (or alleged omission) to state therein a material fact
      required to be stated therein or necessary to make the statements therein not
      misleading (in case of any prospectus, in light of the circumstances in which
      they were made), and will reimburse the Company, such directors and officers,
      and each person controlling the Company for reasonable legal and any other
      expenses reasonably incurred in connection with investigating or defending
      any
      such claim, loss, damage, liability or action as incurred, in each case to
      the
      extent, but only to the extent, that such untrue statement or omission or
      allegation thereof is made in reliance upon and in conformity with written
      information furnished to the Company by or on behalf of the Holder specifically
      for use in preparation of the Registration Statement, prospectus, amendment
      or
      supplement. Notwithstanding the foregoing, a Holder’s aggregate liability
      pursuant to this subsection (b) and subsection (d) shall be limited to the
      net
      amount received by the Holder from the sale of the Registrable Securities
      pursuant to the Registration Statement.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

     

    (c) Each
      party entitled to indemnification under this Section 6.6 (the “Indemnified
      Party”)
      shall
      give notice to the party required to provide indemnification (the “Indemnifying
      Party”)
      promptly after such Indemnified Party has actual knowledge of any claim as
      to
      which indemnity may be sought, and shall permit the Indemnifying Party (at
      its
      expense) to assume the defense of any such claim or any litigation resulting
      therefrom, provided that counsel for the Indemnifying Party, who shall conduct
      the defense of such claim or litigation, shall be approved by the Indemnified
      Party (whose approval shall not unreasonably be withheld), and the Indemnified
      Party may participate in such defense at such Indemnified Party’s expense, and
      provided further that the failure of any Indemnified Party to give notice as
      provided herein shall not relieve the Indemnifying Party of its obligations
      under this Agreement, except to the extent such failure is materially
      prejudicial to the Indemnifying Party in defending such claim or litigation.
      An
      Indemnifying Party shall not be liable for any settlement of an action or claim
      effected without its written consent (which consent will not be unreasonably
      withheld). No Indemnifying Party, in its defense of any such claim or
      litigation, shall, except with the consent of each Indemnified Party, consent
      to
      entry of any judgment or enter into any settlement which does not include as
      an
      unconditional term thereof the giving by the claimant or plaintiff to such
      Indemnified Party of a release from all liability in respect to such claim
      or
      litigation.

     

    (d) If
      the
      indemnification provided for in this Section 6.6 is held by a court of competent
      jurisdiction to be unavailable to an Indemnified Party with respect to any
      loss,
      liability, claim, damage or expense referred to therein, then the Indemnifying
      Party, in lieu of indemnifying such Indemnified Party thereunder, shall
      contribute to the amount paid or payable by such Indemnified Party as a result
      of such loss, liability, claim, damage or expense in such proportion as is
      appropriate to reflect the relative fault of the Indemnifying Party on the
      one
      hand and of the Indemnified Party on the other in connection with the statements
      or omissions which resulted in such loss, liability, claim, damage or expense
      as
      well as any other relevant equitable considerations. The relative fault of
      the
      Indemnifying Party and of the Indemnified Party shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of a
      material fact or the omission to state a material fact relates to information
      supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct
      or
      prevent such statement or omission.

     

    6.7    (a)
      Each
      Holder agrees that, upon receipt of any notice from the Company of the happening
      of any event requiring the preparation of a supplement or amendment to a
      prospectus relating to Registrable Securities so that, as thereafter delivered
      to the Holders, such prospectus shall not contain an untrue statement of a
      material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein not misleading, each Holder will
      forthwith discontinue disposition of Registrable Securities pursuant to the
      Registration Statement and prospectus contemplated by Section 6.1 until its
      receipt of copies of the supplemented or amended prospectus from the Company
      and, if so directed by the Company, each Holder shall deliver to the Company
      all
      copies, other than permanent file copies then in such Holder’s possession, of
      the prospectus covering such Registrable Securities current at the time of
      receipt of such notice.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

     

    (b) Notwithstanding
      anything in this Agreement to the contrary, if the Company shall notify the
      Holders participating in a registration that the Board of Directors of the
      Company has made the good faith determination (i) that continued use by
      such Holders of the Registration Statement for purposes of effecting offers
      or
      sales of Shares or Warrant Shares pursuant thereto would require, under the
      Securities Act, premature disclosure in the Registration Statement (or the
      prospectus relating thereto) of material, nonpublic information concerning
      the
      Company, its business or prospects or any proposed material transaction
      involving the Company, (ii) that such premature disclosure would be
      materially adverse to the Company, its business or prospects or any such
      proposed material transaction or would make the successful consummation by
      the
      Company of any such material transaction significantly less likely and
      (iii) that it is therefore desirable to suspend the use by such Holders of
      such Registration Statement (and the prospectus relating thereto) for purposes
      of effecting offers or sales of Shares and Warrant Shares pursuant thereto,
      then
      the right of such Holders to use the Registration Statement (and the prospectus
      relating thereto) for purposes of effecting offers or sales of Shares and
      Warrant Shares pursuant thereto shall be suspended. Notwithstanding the
      foregoing, the Company shall not under any circumstances be entitled to exercise
      its right to suspend the use of the Registration Statement on more than three
      occasions during any 12-month period or for more than 20 days per such occasion.
      Each Holder hereby covenants and agrees that it will not sell any Shares or
      Warrant Shares pursuant to the Registration Statement during the periods the
      Registration Statement is withdrawn or the ability to sell thereunder is
      suspended as set forth in this Section 6.7(b).

     

    (c) As
      a
      condition to the inclusion of its Registrable Securities, each Holder shall
      furnish to the Company such information regarding such Holder and the
      distribution proposed by such Holder as the Company may reasonably request
      in
      writing, including completing an Investor Questionnaire in the form provided
      by
      the Company, or as shall be required in connection with any registration
      referred to in this Article 6.

     

    (d) Each
      Holder hereby covenants with the Company (i) not to make any sale of the
      Registrable Securities without effectively causing the prospectus delivery
      requirements under the Securities Act to be satisfied, and (ii) if such
      Registrable Securities are to be sold by any method or in any transaction other
      than on a national securities exchange, Nasdaq or in the over-the-counter
      market, in privately negotiated transactions, or in a combination of such
      methods, to notify the Company at least five Business Days prior to the date
      on
      which the Holder first offers to sell any such Registrable
      Securities.

     

    (e) Each
      Holder acknowledges and agrees that the Registrable Securities sold pursuant
      to
      the Registration Statement are not transferable on the books of the Company
      unless the stock certificate submitted to the transfer agent evidencing such
      Registrable Securities is accompanied by a certificate reasonably satisfactory
      to the Company to the effect that (i) the Registrable Securities have been
      sold
      in accordance with such Registration Statement and (ii) the requirement of
      delivering a current prospectus has been satisfied.

     

    
      
        
        

      

      
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    (f) Each
      Holder agrees not to take any action with respect to any distribution deemed
      to
      be made pursuant to such Registration Statement which would constitute a
      violation of Regulation M under the Exchange Act or any other applicable rule,
      regulation or law.

     

    (g) At
      the
      end of the Registration Period the Holders shall discontinue sales of shares
      pursuant to such Registration Statement upon receipt of notice from the Company
      of its intention to remove from registration the shares covered by such
      Registration Statement which remain unsold, and such Holders shall notify the
      Company of the number of shares registered which remain unsold immediately
      upon
      receipt of such notice from the Company.

     

    6.8 With
      a
      view to making available to the Holders the benefits of certain rules and
      regulations of the SEC which at any time permit the sale of the Registrable
      Securities to the public without registration, so long as the Holders still
      own
      Registrable Securities, the Company shall use commercially reasonable efforts
      to:

     

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144 under the Securities Act, at all times;

     

    (b) file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the Exchange Act; and 

     

    (c) so
      long
      as a Holder owns any Registrable Securities, furnish to such Holder, upon any
      reasonable request, a written statement by the Company as to its compliance
      with
      Rule 144 under the Securities Act, and of the Exchange Act, a copy of the most
      recent annual or quarterly report of the Company, and such other reports and
      documents of the Company as such Holder may reasonably request in availing
      itself of any rule or regulation of the SEC allowing a Holder to sell any such
      securities without registration.

     

    6.9 The
      rights to cause the Company to register Registrable Securities granted to the
      Holders by the Company under Section 6.1 may be assigned by a Holder in
      connection with a transfer by such Holder of all or a portion of its Registrable
      Securities, provided,
      however,
      that
      such transfer must be made at least ten days prior to the Filing Date and that
      (i) such transfer must otherwise be effected in accordance with applicable
      securities laws; (ii) such Holder gives prior written notice to the Company
      at
      least ten days prior to the Filing Date; and (iii) such transferee agrees in
      writing to comply with the terms and provisions of this Agreement, has provided
      the Company with a completed Investor Questionnaire in such form as is
      reasonably requested by the Company, and such transfer is otherwise in
      compliance with this Agreement. Except as specifically permitted by this Section
      6.9, the rights of a Holder with respect to Registrable Securities as set out
      herein shall not be transferable to any other Person, and any attempted transfer
      shall cause all rights of such Holder therein to be forfeited.

     

    6.10 The
      rights of the Holders under any provision of this Article 6 may be waived
      (either generally or in a particular instance, either retroactively or
      prospectively and either for a specified period of time or indefinitely) or
      amended by an instrument in writing signed by Holders of at least a majority
      of
      the number of Registrable Securities; provided, that any rights of the Holders
      relating to payment obligations of the Company may only be waived or amended
      by
      an instrument in writing signed by all Holders.

     

    
      
        
        

      

      
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    ARTICLE
      7

     

    DEFINITIONS

     

    As
      used
      herein, the following capitalized terms have the following
      meanings:

     

    7.1 “Affiliate”
      means,
      with respect to any Person (as defined below), any other Person controlling,
      controlled by or under direct or indirect common control with such Person (for
      the purposes of this definition “control,”
      when
      used with respect to any specified Person, shall mean the power to direct the
      management and policies of such person, directly or indirectly, whether through
      ownership of voting securities, by contract or otherwise; and the terms
“controlling”
      and
“controlled”
      shall
      have meanings correlative to the foregoing).

     

    7.2 “Business
      Day”
      means a
      day Monday through Friday on which banks are generally open for business in
      New
      York City.

     

    7.3 “Bylaws”
      has
      the
      meaning set forth in Section 2.3.

     

    7.4 “Certificate
      of Incorporation”
      has the
      meaning set forth in Section 2.3.

     

    7.5 “Closing”
      has the
      meaning set forth in Section 1.3.

     

    7.6 “Closing
      Date”
      has the
      meaning set forth in Section 1.3.

     

    7.7 “Common
      Stock”
      means
      the common stock, par value $0.01 per share, of the Company.

     

    7.8 “Company”
      means
      Columbia Laboratories, Inc.

     

    7.9 “Exchange
      Act”
      means
      the Securities Exchange Act of 1934, as amended.

     

    7.10 “Filing
      Date”
      has the
      meaning set forth in Section 6.1.

     

    7.11 “Final
      Prospectus”
      has the
      meaning set forth in Section 6.6(a).

     

    7.12 “Financial
      Statements”
      means
      the
      financial statements of the Company included in the SEC Documents.

     

    7.13 “Holder”
      means
      any Purchaser for so long as such Purchaser holds Registrable Securities, or
      any
      person to whom the rights under Article 6 have been transferred in accordance
      with Section 6.9 hereof.

     

    7.14 “Indemnified
      Party”
      has the
      meaning set forth in Section 6.6(c).

     

    7.15 “Indemnifying
      Party”
      has the
      meaning set forth in Section 6.6(c).

     

    7.16 “Intellectual
      Property”
      has the
      meaning set forth in Section 2.10.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

     

    7.17 “Material
      Adverse Effect”
      means a
      material adverse effect on (a) the business, operations, assets or financial
      condition of the Company, taken as a whole, or (b) the ability of the Company
      to
      perform its obligations pursuant to the transactions contemplated by this
      Agreement.

     

    7.18 “Nasdaq”
      means
      The Nasdaq National Market or any successor thereto.

     

    7.19 “Offering”
      means
      the private placement of the Company’s Securities contemplated by this
      Agreement.

     

    7.20 “Penalty
      Period” has
      the
      meaning set forth in Section 6.3.

     

    7.21 “Person”
      means
      any person, individual, corporation, limited liability company, partnership,
      trust or other nongovernmental entity or any governmental agency, court,
      authority or other body (whether foreign, federal, state, local or
      otherwise).

     

    7.22 “Placement
      Agent”
      means
      Banc of America Securities LLC.

     

    7.23 “Purchasers”
      mean the
      Purchasers whose names are set forth on the signature pages of this Agreement,
      and their permitted transferees.

     

    7.24 “Purchase
      Price”
      has the
      meaning set forth in Section 1.1.

     

    7.25 The
      terms
“register,” “registered”
      and
“registration”
      refer to
      the registration effected by preparing and filing a registration statement
      in
      compliance with the Securities Act, and the declaration or ordering of the
      effectiveness of such registration statement.

     

    7.26 “Registrable
      Securities”
      means
      (i) the Shares and (ii) the Warrant Shares; provided,
      however,
      that
      securities shall only be treated as Registrable Securities if and only for
      so
      long as they (A) have not been disposed of pursuant to a registration statement
      declared effective by the SEC, (B) have not been sold in a transaction exempt
      from the registration and prospectus delivery requirements of the Securities
      Act
      so that all transfer restrictions and restrictive legends with respect thereto
      are removed upon the consummation of such sale or (C) are held by a Holder
      or a permitted transferee pursuant to Section 6.9.

     

    7.27 “Registration
      Default” has
      the
      meaning set forth in Section 6.3.

     

    7.28 “Registration
      Expenses”
      means
      all expenses incurred by the Company in complying with Section 6.1 hereof,
      including, without limitation, all registration, qualification and filing fees,
      printing expenses, escrow fees, fees and expenses of counsel for the Company,
      blue sky fees and expenses and the expense of any special audits incident to
      or
      required by any such registration (but, for the avoidance of doubt, excluding
      the fees of legal counsel for any Holder).

     

    7.29 “Registration
      Statement”
      has the
      meaning set forth in Section 6.1.

     

    7.30 “Registration
      Period”
      has the
      meaning set forth in Section 6.4(a).

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    

     

    7.31 “Rule
      144”
      means
      Rule 144 promulgated under the Securities Act, or any successor
      rule.

     

    7.32 “SEC”
      means
      the United States Securities and Exchange Commission.

     

    7.33 “SEC
      Documents”
      has the
      meaning set forth in Section 2.6.

     

    7.34 “Securities”
      has the
      meaning set forth in Section 1.1.

     

    7.35 “Securities
      Act”
      means
      the Securities Act of 1933, as amended, and the rules and regulations
      thereunder, or any similar successor statute.

     

    7.36 “Selling
      Expenses”
      means
      all selling commissions applicable to the sale of Registrable Securities and
      all
      fees and expenses of legal counsel for any Holder.

     

    7.37 “Shares”
      has the
      meaning set forth in Section 1.1.

     

    7.38 “Subsidiary”
      of
      any
      person shall mean any corporation, partnership, limited liability company,
      joint
      venture or other legal entity of which such Person (either above or through
      or
      together with any other subsidiary) owns, directly or indirectly, more than
      50%
      of the stock or other equity interests the holders of which are generally
      entitled to vote for the election of the board of directors or other governing
      body of such corporation or other legal entity.

     

    7.39 “Warrant
      Shares”
      has the
      meaning set forth in Section 2.4.

     

    7.40 “Warrants”
      has the
      meaning set forth in Section 1.1.

     

    ARTICLE
      8

     

    GOVERNING
      LAW; MISCELLANEOUS

     

    8.1 Governing
      Law; Jurisdiction.
      This
      Agreement will be governed by and interpreted in accordance with the laws of
      the
      State of New York without regard to the principles of conflict of laws.

     

    8.2 Counterparts;
      Signatures by Facsimile.
      This
      Agreement may be executed in two or more counterparts, all of which are
      considered one and the same agreement and will become effective when
      counterparts have been signed by each party and delivered to the other parties.
      This Agreement, once executed by a party, may be delivered to the other parties
      hereto by facsimile transmission of a copy of this Agreement bearing the
      signature of the party so delivering this Agreement.

     

    8.3 Headings.
      The
      headings of this Agreement are for convenience of reference only, are not part
      of this Agreement and do not affect its interpretation.

     

    8.4 Severability.
      If
      any
      provision of this Agreement is invalid or unenforceable under any applicable
      statute or rule of law, then such provision will be deemed modified in order
      to
      conform with such statute or rule of law. Any provision hereof that may prove
      invalid or unenforceable under any law will not affect the validity or
      enforceability of any other provision hereof.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

     

    8.5 Entire
      Agreement; Amendments.
      This
      Agreement (including all schedules and exhibits hereto) and any confidentiality
      agreement entered into between the Company and a Purchaser (which
      confidentiality agreement shall continue to be in full force and effect)
      constitute the entire agreement among the parties hereto with respect to the
      subject matter hereof and thereof. There are no restrictions, promises,
      warranties or undertakings, other than those set forth or referred to herein
      or
      therein. This Agreement supersedes all prior agreements and understandings
      among
      the parties hereto with respect to the subject matter hereof. This Agreement
      and
      any provision hereof may be changed, waived, discharged or terminated only
      by an
      instrument in writing signed by the Company and Purchasers holding a majority
      of
      the Registrable Securities. Any amendment or waiver effected in accordance
      with
      this Section 8.5 shall be binding upon each holder of any Securities purchased
      under this Agreement at the time outstanding (including securities into which
      such Securities are convertible and for which such Securities are exercisable),
      each future holder of all such securities, and the Company.

     

    8.6 Notices.
      All
      notices required or permitted hereunder shall be in writing and shall be deemed
      effectively given: (a) upon personal delivery to the party to be notified,
      (b) when sent by confirmed email, telex or facsimile if sent during normal
      business hours of the recipient, if not, then on the next business day,
      (c) five days after having been sent by registered or certified mail,
      return receipt requested, postage prepaid, or (d) one business day after
      deposit with a nationally recognized overnight courier, specifying next day
      delivery, with written verification of receipt. The addresses for such
      communications are:

     

    
      	
              If
                to the Company:

            	
              Columbia
                Laboratories, Inc.

            
	 	
              354
                Eisenhower Parkway

            
	 	
              Livingston,
                New Jersey 07039

            
	 	
              Telecopier
                No.: (973) 994-3001

            
	 	
              Telephone
                No.: (973) 994-3999

            
	 	
              Attention:
                General Counsel

            
	 	 
	 	
            
	
              With
                a copy to:

            	
              Kaye
                Scholer LLP

            
	 	
              425
                Park Avenue

            
	 	
              New
                York, New York 10022

            
	 	
              Telecopier
                No.: (212) 836-8689

            
	 	
              Telephone
                No.: (212) 836-8673

            
	 	
              Attention:
                Adam H. Golden, Esq.

            

    

     

    If
      to a
      Purchaser: To the address set forth immediately below such Purchaser’s name on
      the signature pages hereto. Each party will provide ten days’ advance written
      notice to the other parties of any change in its address.

     

    

    8.7 Successors
      and Assigns.
      This
      Agreement is binding upon and inures to the benefit of the parties and their
      successors and permitted assigns. The Company will not assign this Agreement
      or
      any rights or obligations hereunder without the prior written consent of the
      Purchasers, and no Purchaser may assign this Agreement or any rights or
      obligations hereunder without the prior written consent of the Company, except
      as permitted in accordance with Section 6.9 hereof.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    

     

    8.8 Third
      Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto, their respective
      permitted successors and assigns and the Placement Agent, and is not for the
      benefit of, nor may any provision hereof be enforced by, any other
      person.

     

    8.9 Further
      Assurances.
      Each
      party will do and perform, or cause to be done and performed, all such further
      acts and things, and will execute and deliver all other agreements,
      certificates, instruments and documents, as another party may reasonably request
      in order to carry out the intent and accomplish the purposes of this Agreement
      and the consummation of the transactions contemplated hereby.

     

    8.10 No Strict
      Construction. The
      language used in this Agreement is deemed to be the language chosen by the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    8.11 Equitable
      Relief.
      The
      Company recognizes that, if it fails to perform or discharge any of its
      obligations under this Agreement, any remedy at law may prove to be inadequate
      relief to the Purchasers. The Company therefore agrees that the Purchasers
      are
      entitled to seek temporary and permanent injunctive relief in any such case.
      Each Purchaser also recognizes that, if it fails to perform or discharge any
      of
      its obligations under this Agreement, any remedy at law may prove to be
      inadequate relief to the Company. Each Purchaser therefore agrees that the
      Company is entitled to seek temporary and permanent injunctive relief in any
      such case

     

    8.12 Survival
      of Representations and Warranties. Notwithstanding
      any investigation made by any party to this Agreement, all representations
      and
      warranties made by the Company and the Purchasers herein shall survive for
      a
      period of one year following the date hereof, except for Sections 2.1, 2.2,
      2.3,
      2.11 and 2.19 which representations and warranties shall survive the Closing
      until the lapse of the statute of limitations. 

     

    8.13 Independent
      Nature of Purchasers' Obligations and Rights. The
      obligations of each Purchaser under this Agreement are several and not joint
      with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under this Agreement. Nothing contained herein and no action taken
      by
      any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers
      as
      a partnership, an association, a joint venture or any other kind of entity,
      or
      create a presumption that the Purchasers are in any way acting in concert or
      as
      a group, or are deemed affiliates (as such term is defined under the Exchange
      Act) with respect to such obligations or the transactions contemplated by this
      Agreement. Each Purchaser shall be entitled to independently protect and enforce
      its rights, including without limitation the rights arising out of this
      Agreement, and it shall not be necessary for any other Purchaser to be joined
      as
      an additional party in any proceeding for such purpose. 

     

    [Signature
      Page Follows]

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof, the
      undersigned Purchasers and the Company have caused this Agreement to be duly
      executed as of the date first above written.

    

    COLUMBIA
      LABORATORIES, INC.

     

    By:
      /s/
      Robert S. Mills________________ 

    Name:
      Robert S. Mills

    Title:
      President and Chief Executive Officer

    

     

    

     

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Knott
      Partners, LP_______________ 

    (investor
      name)

    By:
      /s/________
      _______________ 

    (signature)

    ____________________________  

    (print
      name and title)

     

    Address:
      _____________________   

     

    ___________________  

    
      ___________________  

       

    

    

    Facsimile:
       ____________________ 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Baker
      Bros. Investments, L.P.

    (investor
      name)

    

    By:
      Baker
      Bros. Capital, L.P., General Partner

    By:
      Baker
      Bros. Capital (GP), LLC, General Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

    

                                                                                        

    (print
      name and title)

     

    

     

    Baker
      Bros. Investments, II L.P.

    (investor
      name)

    

    By:
      Baker
      Bros. Capital, L.P., General Partner

    By:
      Baker
      Bros. Capital (GP), LLC, General Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

    

     
                                                                                         

    (print
      name and title)

     

    

     

    Baker
      Biotech Fund I, L.P.

    (investor
      name)

    

    By:
      Baker
      Biotech Capital, L.P., General Partner

    By:
      Baker
      Biotech Capital (GP), LLC, General 

    Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

    

             
                                                                                 

    (print
      name and title)

     

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    Baker
      Biotech Fund II, L.P.

    (investor
      name)

    

    By:
      Baker
      Biotech Capital II, L.P., General Partner

    By:
      Baker
      Biotech Capital II (GP), LLC, General 

    Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

    

            
                                                                                  

    (print
      name and title)

     

    

     

    Baker
      Biotech Fund II (Z), L.P.

    (investor
      name)

    

    By:
      Baker
      Biotech Capital II (Z), L.P., General 

    Partner

    By:
      Baker
      Bros. Capital II (Z) (GP), LLC, General 

    Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

    

                    
                                                                          

    (print
      name and title)

     

    

     

    Baker
      Biotech Fund III, L.P.

    (investor
      name)

    

    By:
      Baker
      Biotech Capital III, L.P., General Partner

    By:
      Baker
      Biotech Capital III (GP), LLC, General 

    Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

                         
                                                                     

    (print
      name and title)

     

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    Baker
      Biotech Fund III (Z), L.P.

    (investor
      name)

    

    By:
      Baker
      Biotech Capital III (Z), L.P., General 

    Partner

    By:
      Baker
      Biotech Capital III (Z) (G), LLC, 

    General
      Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

    

                           
                                                                   

    (print
      name and title)

     

    

     

    14159,
      L.P.

    (investor
      name)

    

    By:
      14159
      Capital, L.P., General Partner

    By:
      14159
      Capital (GP), LLC, General Partner

    By:
      Felix
      Baker, Ph.D., Managing Member

    

    

    By
                                /s/
      Felix
      Baker                            

    (signature)

    

                           
                                                                   

    (print
      name and title)

     

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Harvest
      Offshore Investors
      Ltd.                        
 

    (investor
      name)

    By:
      /s/
      John
      Christ                                               
 

    (signature)

    John
      Christ,
      Principal                                          
 

    (print
      name and title)

     

    Address:
       600
      Madison Avenue, 4th Floor 
           

     

    New
      York, NY
      10022                       
 

     

    

    Facsimile:
      (212)
      634-3636                                    
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    New
      Americans
      LLC                                           
 

    (investor
      name)

    By:
      /s/
      John
      Christ                                              
 

    (signature)

    John
      Christ,
      Principal                                         
 

    (print
      name and title)

     

    Address:
       600
      Madison Avenue, 4th Floor   
       

     

    New
      York, NY
      10022                        

     

    

    Facsimile:
      (212)
      634-3636                    
              
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Harvest
      Capital
      LP                                              
 

    (investor
      name)

    By:
      /s/
      John
      Christ                                              
 

    (signature)

    John
      Christ,
      Principal                                         
 

    (print
      name and title)

     

    Address:
       600
      Madison Avenue, 4th Floor   
        

     

    New
      York, NY
      10022                
       

     

    

    Facsimile:
      (212)
      634-3636                                  
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    CL
      Harvest
      LLC                                               
 

    (investor
      name)

    By:
      /s/
      John
      Christ                              
           
 

    (signature)

    John
      Christ,
      Principal                           
           

    (print
      name and title)

     

    Address:
       600
      Madison Avenue, 4th Floor
       

     

    New
      York, NY
      10022               
     

     

    

    Facsimile:
      (212)
      634-3636                               
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Harvest
      AA Capital
      LP                                        
 

    (investor
      name)

    By:
      /s/
      John
      Christ                                               
 

    (signature)

    John
      Christ,
      Principal                                          
 

    (print
      name and title)

     

    Address:
       600
      Madison Avenue, 4th Floor     
       

     

    New
      York, NY
      10022                        
 

     

    

    Facsimile:
      (212)
      634-3636                                     
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    TE
      Harvest Portfolio
      Ltd.                                    
 

    (investor
      name)

    By:
      /s/
      John
      Christ                       
                       
 

    (signature)

    John
      Christ,
      Principal                        
                  
 

    (print
      name and title)

     

    Address:
       600
      Madison Avenue, 4th Floor      
       

     

    New
      York, NY
      10022                         
 

     

    

    Facsimile:
      (212)
      634-3636                                     
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Domain
      Public Equity Partners
      L.P.                   

    by
      Domain Public Equity Partners LLC  
          

    (investor
      name)

    By:
      /s/
      Nicole
      Vitullo                                            

    (signature)

    Nicole
      Vitullo, Managing
      Member                   
 

    (print
      name and title)

     

    Address:
       One
      Palmer Square, Suite 515         
 

     

    Princeton,
      NJ
      08542                         
 

     

    

    Facsimile:
      (609)
      683-4581                                     
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Castlerock
      Partners,
      L.P.            
                             
 

    (investor
      name)

    By:
      /s/
      Maria Lamari
      Burden                                   
 

    (signature)

    Maria
      Lamari Burden, CFO of the General Partner

    (print
      name and title)

     

    Address:
       c/o
      CastleRock
      Management                
 

     

    101
      Park Avenue, 23rd Floor                
       

    New
      York, NY
      10178                              
 

    

    Facsimile:
      (212)
      251-3388                                           
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Castlerock
      Partners II,
      L.P.                                       
 

    (investor
      name)

    By:
      /s/
      Maria Lamari
      Burden                                      

    (signature)

    Maria
      Lamari Burden, CFO of the General Partner

    (print
      name and title)

     

    Address:
       c/o
      CastleRock
      Management                
 

     

    101
      Park Avenue, 23rd Floor                
       

    New
      York, NY
      10178                                

    

    Facsimile:
      (212)
      251-3388                                           
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    CastleRock
      Fund,
      Ltd.                                                      
 

    (investor
      name)

    By:
      /s/
      Maria Lamari
      Burden                                            
 

    (signature)

    Maria
      Lamari Burden, CFO of the Investment Adviser

    (print
      name and title)

     

    Address:
       c/o
      CastleRock
      Management                        
 

     

    101
      Park Avenue, 23rd Floor                        
       

    New
      York, NY
      10178                                      
 

    

    Facsimile:
      (212)
      251-3388                                                     

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Bermuda
      Partners,
      L.P.                                                     
 

    (investor
      name)

    By:
      /s/
      Maria Lamari
      Burden                                            
 

    (signature)

    Maria
      Lamari Burden, CFO of the Investment Adviser

    (print
      name and title)

     

    Address:
       c/o
      Castlerock
      Management                         
 

     

    101
      Park Avenue, 23rd Floor                       
       

    New
      York, NY
      10178                                     
 

    

    Facsimile:
      (212)
      251-3388                                                  
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    CastleRock
      Asset Management, Inc. for HFR HE Sytematic Master Trust 

    (investor
      name)

    By:
      /s/
      Maria Lamari
      Burden                                                                              
 

    (signature)

    Maria
      Lamari Burden,
      CFO                                                                                 
 

    (print
      name and title)

     

    Address:
       c/o
      CastleRock
      Management                                                            

     

    101
      Park Avenue, 23rd Floor                                                          
       

    New
      York, NY
      10178                                                                        
 

    

    Facsimile:
      (212)
      251-3388                                                                                       

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Curran
      Family Partners
      II                          
 

    (investor
      name)

    By:
      /s/
      John P.
      Curran                                 

    (signature)

    John
      P. Curran, General
      Partner                

    (print
      name and title)

     

    Address:
       100
      Scarborough Sta. Rd.        

     

    Briarcliff
      Manor, NY 10510     

    

    Facsimile:
      (914)
      944-1471                          
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Curran
      Partners                                          
 

    (investor
      name)

    By:
      /s/
      John P.
      Curran                               
 

    (signature)

    John
      P. Curran, General
      Partner               
 

    (print
      name and title)

     

    Address:
       100
      Scarborough Sta. Rd.        

     

    Briarcliff
      Manor, NY 10510     

    

    Facsimile:
      (914)
      944-1471                           
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Royal
      Bank of Canada

    By
      its
      Agent: RBC Capital Markets Corporation 

    (investor
      name)

    By:
      /s/
      Steven C.
      Milke                                          
 

    (signature)

    Steven
      C. Milke, Managing
      Director                   
 

    (print
      name and title)

     

    By:
      /s/
      Josef
      Muskatel                                            
 

    (signature)

    Josef
      Muskatel, Director and Senior Counsel     
 

    (print
      name and title)

     

    Address:
       One
      Liberty
      Plaza                                   
 

     

    165
      Broadway                                        
 

    New
      York, NY
      10006                             
 

    

    Facsimile:
      (212)
      858-7349                                          
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Iroquois
      Master Fund
      Ltd.                                     
 

    (investor
      name)

    By:
      /s/
      Joshua
      Silverman                                         
 

    (signature)

    Joshua
      Silverman, Authorized
      Signatory             
 

    (print
      name and title)

     

    Address:
       641
      Lexington Avenue, 16th Floor      
       

     

    New
      York, NY
      10022                             
 

     

    

    Facsimile:
      (212)
      207-3452                                          
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Hudson
      Bay Fund
      LP                                      
 

    (investor
      name)

    By:
      /s/
      Yoaw
      Roth                                            
 

    (signature)

    Yoaw
      Roth, Principal and Portfolio Manager 

    (print
      name and title)

     

    Address:
       120
      Broadway, 40th Floor             
       

     

    New
      York, NY
      10271                     
 

     

    

    Facsimile:
      (212)
      571-1279                                    

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Nite
      Capital
      LP                                                              
 

    (investor
      name)

    By:
      /s/
      Keith A.
      Goodman                                           
 

    (signature)

    Keith
      A. Goodman, Manager of the General Partner 

    (print
      name and title)

     

    Address:
       100
      East Cook Avenue, Suite
      201            
 

     

    Libertyville,
      IL
      60048                                
 

     

    

    Facsimile:
      (847)
      968-7648                                             
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    UBS
      O’Connor LLC fbo O’Connor PIPEs Corporate Strategies Master
      Limited 

    (investor
      name)

    By:
      /s/
      George
      Locasto                                                                                               
 

    (signature)

    George
      Locasto, Managing
      Director                                                                         
 

    (print
      name and title)

     

    Address:
       One
      North Wacker Drive, 32nd Floor                                                       

     

    Chicago,
      IL
      60606                                                                                      
 

     

    

    Facsimile:
      (312)
      525-6271                                                                                             
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Enable
      Growth Partners
      LP                          
 

    (investor
      name)

    By:
      /s/
      Mitch
      Levine                                    
 

    (signature)

    Mitch
      Levine, Managing
      Partner               
 

    (print
      name and title)

     

    Address:
       One
      Ferry Building, Suite 255    

     

    San
      Francisco, CA 94111         
 

     

    

    Facsimile:
      (415)
      677-1580                                

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Enable
      Opportunity Partners
      LP                 
 

    (investor
      name)

    By:
      /s/
      Mitch
      Levine                                     
 

    (signature)

    Mitch
      Levine, Managing
      Partner                
 

    (print
      name and title)

     

    Address:
       One
      Ferry Building, Suite 255     

     

    San
      Francisco, CA 94111         
 

     

    

    Facsimile:
      (415)
      677-1580                                

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Pierce
      Diversified Strategy Master Fund LLC 

    (investor
      name)

    By:
      /s/
      Mitch
      Levine                                          
 

    (signature)

    Mitch
      Levine, Managing
      Partner                    
 

    (print
      name and title)

     

    Address:
       One
      Ferry Building, Suite 255        
 

     

    San
      Francisco, CA
      94111              
 

     

    

    Facsimile:
      (415)
      677-1580                                    
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Smithfield
      Fiduciary
      Ltd.                                              
 

    (investor
      name)

    By:
      /s/
      Adam J.
      Chill                                                      
 

    (signature)

    Adam
      J. Chill, Authorized
      Signatory                           
 

    (print
      name and title)

     

    Address:
       c/o
      Highbridge Capital Management, LLC 

     

    9
      West
      57th Street,
      27th Floor                    

    New
      York, NY
      10019                                   
 

    

    Facsimile:
      (212)
      751-0755                                                
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Capital
      Ventures
      International                                                   

    by:
      Heights Capital Management, Inc., its authorized agent 

    (investor
      name)

    By:
      /s/                                                                                             

    (signature)

    
                                                          
                  
                                         

    

    (print
      name and title)

     

    Address:
       101
      California Street, Suite
      3250                              

     

    San
      Francisco, CA
      94111                    
                 
 

     

    

    Facsimile:
      (415)
      403-6525                                                           
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    RAQ,
      LLC                                                                        
 

    (investor
      name)

    By:
      /s/
      Lindsay A.
      Rosenwald                                     
 

    (signature)

    Lindsay
      A. Rosenwald, M.D., Managing Member     

    (print
      name and title)

     

    Address:
       787
      Seventh Avenue, 48th Floor               
       

     

    New
      York, NY
      10019                                   
 

     

    

    Facsimile:
      (212)
      554-4355                                                
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Valesco
      Healthcare Partners I
      LP                       
 

    (investor
      name)

    By:
      /s/
      I.
      Keith
      Maher                                          
 

    (signature)

    I.
      Keith Maher, Portfolio
      Manager                     
 

    (print
      name and title)

     

    Address:
       787
      Seventh Avenue, 4th Floor       
       

     

    New
      York, NY
      10019                         
 

     

    

    Facsimile:
      (212)
      554-4355                                       
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Valesco
      Healthcare Partners II
      LP                  
 

    (investor
      name)

    By:
      /s/
      I.
      Keith
      Maher                                      
 

    (signature)

    I.
      Keith Maher, Portfolio
      Manager                
 

    (print
      name and title)

     

    Address:
       787
      Seventh Avenue, 4th Floor    
       

     

    New
      York, NY
      10019                      
 

     

    

    Facsimile:
      (212)
      554-4355                                   
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    Valesco
      Healthcare Overseas Fund, Ltd.    
            

    (investor
      name)

    By:
      /s/
      I.
      Keith
      Maher                                  
            
 

    (signature)

    I.
      Keith Maher, Portfolio Manager        
                 
 

    (print
      name and title)

     

    Address:
       787
      Seventh Avenue, 4th Floor            
       

     

    New
      York, NY
      10019                                

     

    

    Facsimile:
      (212)
      554-4355                                           
 

    

    

    

     

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Purchaser

    

    James
      J.
      Apostolakis                 
           
 

    (investor
      name)

    By:
      /s/
      James J. Apostolakis       
           

    (signature)

    James
      J.
      Apostolakis                              
 

    (print
      name and title)

    
       

      Address:                                                      

                     
                                                              

      
 

    

    

    Facsimile:
      (646)
      202-9608                          
 

    

    

    
      
        SECURITIES
          PURCHASE AGREEMENT SIGNATURE PAGE

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    SCHEDULE
      OF PURCHASERS

    

    

      
        	
                Purchaser

              	 	
                Shares

              	 	
                Warrants

              	 	
                Aggregate
                  Purchase Price

              	 
	
                Knott
                  Partners, LP

              	 	 	
                1,485,149

              	 	 	
                371,287

              	 	
                $

              	
                6,000,001.96

              	 
	
                Baker
                  Bros. Investments, L.P.

              	 	 	
                23,502

              	 	 	
                5,875

              	 	
                $

              	
                94,948.08

              	 
	
                Baker
                  Bros. Investments II, L.P.

              	 	 	
                31,298

              	 	 	
                7,824

              	 	
                $

              	
                126,443.92

              	 
	
                Baker
                  Biotech Fund I, L.P.

              	 	 	
                48,670

              	 	 	
                12,167

              	 	
                $

              	
                196,626.80

              	 
	
                Baker
                  Biotech Fund I, L.P.

              	 	 	
                87,121

              	 	 	
                21,780

              	 	
                $

              	
                351,968.84

              	 
	
                Baker
                  Biotech Fund II, L.P.

              	 	 	
                212,361

              	 	 	
                53,090

              	 	
                $

              	
                857,938.44

              	 
	
                Baker
                  Biotech Fund II (Z), L.P.

              	 	 	
                41,604

              	 	 	
                10,401

              	 	
                $

              	
                168,080.16

              	 
	
                Baker
                  Biotech Fund III, L.P.

              	 	 	
                342,227

              	 	 	
                85,556

              	 	
                $

              	
                1,382,597.08

              	 
	
                Baker
                  Biotech Fund III (Z), L.P.

              	 	 	
                55,940

              	 	 	
                13,985

              	 	
                $

              	
                225,997.60

              	 
	
                14159,
                  L.P.

              	 	 	
                23,613

              	 	 	
                5,903

              	 	
                $

              	
                95,396.52

              	 
	
                Harvest
                  Offshore Investors

              	 	 	
                263,815

              	 	 	
                65,953

              	 	
                $

              	
                1,065,812.60

              	 
	
                New
                  Americans LLC

              	 	 	
                42,554

              	 	 	
                10,638

              	 	
                $

              	
                171,918.16

              	 
	
                Harvest
                  Capital

              	 	 	
                137,634

              	 	 	
                34,408

              	 	
                $

              	
                556,041.36

              	 
	
                CL
                  Harvest LLC

              	 	 	
                26,752

              	 	 	
                6,688

              	 	
                $

              	
                108,078.08

              	 
	
                Harvest
                  AA Capital LP

              	 	 	
                19,922

              	 	 	
                4,980

              	 	
                $

              	
                80,484.88

              	 
	
                TE
                  Harvest Portfolio Ltd.

              	 	 	
                384,323

              	 	 	
                96,080

              	 	
                $

              	
                1,552,664.92

              	 
	
                Domain
                  Public Equity Partners, L.P.

              	 	 	
                618,812

              	 	 	
                154,703

              	 	
                $

              	
                2,500,000.48

              	 
	
                CastleRock
                  Partners, L.P.

              	 	 	
                222,772

              	 	 	
                55,693

              	 	
                $

              	
                899,998.88

              	 
	
                CastleRock
                  Partners II, L.P.

              	 	 	
                19,802

              	 	 	
                4,950

              	 	
                $

              	
                80,000.08

              	 
	
                CastleRock
                  Fund, Ltd.

              	 	 	
                148,515

              	 	 	
                37,128

              	 	
                $

              	
                600,000.60

              	 
	
                Bermuda
                  Partners, L.P.

              	 	 	
                29,703

              	 	 	
                7,425

              	 	
                $

              	
                120,000.12

              	 
	
                HFR
                  HE Systematic Master Trust

              	 	 	
                74,258

              	 	 	
                18,564

              	 	
                $

              	
                300,002.32

              	 
	
                Curran
                  Partners

              	 	 	
                495,050

              	 	 	
                123,762

              	 	
                $

              	
                2,000,002.00

              	 
	
                Curran
                  Family Partners II

              	 	 	
                198,020

              	 	 	
                49,505

              	 	
                $

              	
                800,000.80

              	 
	
                Royal
                  Bank of Canada

              	 	 	
                433,168

              	 	 	
                108,292

              	 	
                $

              	
                1,749,998.72

              	 
	
                Iroquois
                  Master Fund Ltd.

              	 	 	
                290,842

              	 	 	
                72,710

              	 	
                $

              	
                1,175,001.68

              	 
	
                Hudson
                  Bay Fund LP

              	 	 	
                247,525

              	 	 	
                61,881

              	 	
                $

              	
                1,000,001.00

              	 
	
                Nite
                  Capital LP

              	 	 	
                247,525

              	 	 	
                61,881

              	 	
                $

              	
                1,000,001.00

              	 
	
                UBS
                  O'Connor LLC fbo O'Connor PIPEs Corporate Strategies Master
                  Limited

              	 	 	
                247,525

              	 	 	
                61,881

              	 	
                $

              	
                1,000,001.00

              	 
	
                Enable
                  Growth Partners LP

              	 	 	
                180,693

              	 	 	
                45,173

              	 	
                $

              	
                729,999.72

              	 
	
                Enable
                  Opportunity Partners LP

              	 	 	
                29,703

              	 	 	
                7,425

              	 	
                $

              	
                120,000.12

              	 
	
                Pierce
                  Diversified Strategy Master Fund LLC

              	 	 	
                37,129

              	 	 	
                9,282

              	 	
                $

              	
                150,001.16

              	 
	
                Smithfield
                  Fiduciary Ltd.

              	 	 	
                247,525

              	 	 	
                61,881

              	 	
                $

              	
                1,000,001.00

              	 
	
                Capital
                  Ventures International

              	 	 	
                125,000

              	 	 	
                31,250

              	 	
                $

              	
                505,000.00

              	 
	
                Capital
                  Ventures International

              	 	 	
                122,525

              	 	 	
                30,631

              	 	
                $

              	
                495,001.00

              	 
	
                RAQ,
                  LLC

              	 	 	
                61,881

              	 	 	
                15,470

              	 	
                $

              	
                249,999.24

              	 
	
                Valesco
                  Healthcare Partners I LP

              	 	 	
                12,995

              	 	 	
                3,248

              	 	
                $

              	
                52,499.80

              	 
	
                Valesco
                  Healthcare Partners II LP

              	 	 	
                27,228

              	 	 	
                6,807

              	 	
                $

              	
                110,001.12

              	 
	
                Valesco
                  Healthcare Overseas Fund, Ltd.

              	 	 	
                21,658

              	 	 	
                5,414

              	 	
                $

              	
                87,498.32

              	 
	
                James
                  J. Apostolakis

              	 	 	
                61,881

              	 	 	
                15,470

              	 	
                $

              	
                249,999.24

              	 
	
                Total

              	 	 	
                7,428,220

              	 	 	
                1,857,041

              	 	
                $

              	
                30,010,008.80

              	 

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    WARRANT

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    COLUMBIA
      LABORATORIES, INC.

     

    WARRANT
      TO PURCHASE COMMON STOCK

     

    
      
        	
                No.
                  W-__

              	
                March
                  13, 2006

              

      

    

     

    
      Void
        After March 13, 2011

       

    

    This
      Certifies That,
      for
      value received, __________________________, with its principal office at
      __________________________, or its permitted assigns (the “Holder”),
      is
      entitled to subscribe for and purchase at the Exercise Price (defined below)
      from Columbia Laboratories, Inc., a Delaware corporation, with its principal
      office at 354 Eisenhower Parkway, Livingston, New Jersey 07039 (the “Company”),
      up to
__________
      shares
      of
      common stock of the Company, par value $0.01 per share (the “Common
      Stock”),
      subject to adjustment as provided herein. This Warrant is one of a series of
      Warrants being issued pursuant to the terms of the Securities Purchase
      Agreement, as of March 10, 2006, by and among the Company and the original
      Holder of this Warrant and the other parties named therein (the “Purchase
      Agreement”).
      Capitalized terms not otherwise defined herein shall have the respective
      meanings ascribed to such terms in the Purchase Agreement.

    

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

     

    (a) “Exercise
      Period”
      shall
      mean the period commencing 180 days after the date hereof and ending at 5:00
      p.m., New York time, on March
      13,
      2011,
      unless sooner exercised or terminated as provided below.

     

    (b) “Exercise
      Price” shall
      mean $5.39 per share, subject to adjustment pursuant to Section 5
      below.

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    2. Exercise
      of Warrant. 

     

    2.1 Method
      of Exercise.
      The
      rights represented by this Warrant may be exercised in whole or in part at
      any
      time during the Exercise Period, by delivery (by any method permitted under
      the
      Purchase Agreement) of the following to the Company at its address set forth
      above (or at such other address as it may designate by notice in writing to
      the
      Holder):

     

    (a) An
      executed Notice of Exercise in the form attached hereto;

     

    (b) Payment
      of the Exercise Price either (i) in cash or by check or wire transfer of
      immediately available funds, or (ii) pursuant to a Cashless Exercise, as
      described below; and

     

    (c) This
      Warrant.

     

    Upon
      the
      exercise of the rights represented by this Warrant, shares of Common Stock
      shall
      be issued for the Exercise Shares so purchased, and shall be registered in
      the
      name of the Holder or persons affiliated with the Holder, if the Holder so
      designates, within a reasonable time after the rights represented by this
      Warrant shall have been so exercised and shall be issued in certificate form
      and
      delivered to the Holder, if so requested.

    

    The
      person in whose name any Exercise Shares are to be issued upon exercise of
      this
      Warrant shall be deemed to have become the holder of record of such shares
      on
      the date on which this Warrant was surrendered and payment of the Exercise
      Price
      was made, irrespective of the date of issuance of the shares of Common Stock,
      except that, if the date of such surrender and payment is a date when the stock
      transfer books of the Company are closed, such person shall be deemed to have
      become the holder of such shares at the close of business on the next succeeding
      date on which the stock transfer books are open.

    

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

        

    
      
        	 	
                X
                  =
                  

              	
                Y
                  (B-A)

                B

                 

              
	
                Where:

              	
                X
                  =
                  

              	
                the
                  number of shares of Common Stock to be issued to the Holder.

                 

              
	 	
                Y
                  =

              	
                the
                  number of shares of Common Stock purchasable upon exercise of all
                  of the
                  Warrant or, if only a portion of the Warrant is being exercised,
                  the
                  portion of the Warrant being exercised.

                 

              
	
                A
                  =

              	
                the
                  Exercise Price.

                 

              
	
                B
                  =

              	the
                Current Market Price of one share of Common
                Stock.

      

    

     

     

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

    “Current
      Market Price”
      means on
      any particular date:

     

    (a) if
      the
      Common Stock is traded on the Nasdaq SmallCap Market (or its successor) or
      the
      Nasdaq National Market (or its successor), the average of the closing prices
      of
      the Common Stock of the Company on such market over the five (5) trading days
      ending immediately prior to the applicable date of valuation;

     

    (b) if
      the
      Common Stock is traded on any registered national stock exchange but is not
      traded on the Nasdaq SmallCap Market (or its successor) or the Nasdaq National
      Market (or its successor), the average of the closing prices of the Common
      Stock
      of the Company on such exchange over the five (5) trading days ending
      immediately prior to the applicable date of valuation;

     

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

     

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

     

    2.3 Partial
      Exercise. If
      this
      Warrant is exercised in part only, the Company shall, upon surrender of this
      Warrant, execute and deliver, within 10 days of the date of exercise, a new
      Warrant evidencing the rights of the Holder, or, subject to Section 4.3, such
      other person as shall be designated in the Notice of Exercise, to purchase
      the
      balance of the Exercise Shares purchasable hereunder. In no event shall this
      Warrant be exercised for a fractional Exercise Share, and the Company shall
      not
      distribute a Warrant exercisable for a fractional Exercise Share. Fractional
      Warrant shares shall be treated as provided in Section 6 hereof. 

     

    3. Covenants
      of the Company.

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

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

     

    4. Representations
      of Holder.

     

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

     

    4.2 Securities
      Are Not Registered.

     

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

     

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

     

    (c) The
      Holder is aware that neither the Warrant nor the Exercise Shares may be sold
      pursuant to Rule 144 adopted under the Securities Act unless certain conditions
      are met, including, among other things, the existence of a public market for
      the
      shares, the availability of certain current public information about the
      Company, the resale following the required holding period under Rule 144 and
      the
      number of shares being sold during any three month period not exceeding
      specified limitations. Holder is aware that any such sale made in reliance
      on
      Rule 144, if Rule 144 is available, may be made only in accordance with the
      terms of Rule 144.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

    4.3 Disposition
      of Warrant and Exercise Shares.

     

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

     

    (i) The
      Company shall have received a letter secured by the Holder from the SEC stating
      that no action will be recommended to the SEC with respect to the proposed
      disposition;

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

    8. Transfer
      of Warrant. Subject
      to applicable laws and compliance with Section 4.3 hereof, this Warrant and
      all
      rights hereunder are transferable, by the Holder in person or by duly authorized
      attorney, upon delivery of this Warrant and the form of assignment attached
      hereto to any transferee designated by Holder. The transferee shall sign an
      investment letter in form and substance satisfactory to the
      Company.

     

    9. Lost,
      Stolen, Mutilated or Destroyed Warrant. If
      this
      Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
      as to indemnity or otherwise as it may reasonably impose (which shall, in the
      case of a mutilated Warrant, include the surrender thereof), issue a new Warrant
      of like denomination and tenor as the Warrant so lost, stolen, mutilated or
      destroyed. Any such new Warrant shall constitute an original contractual
      obligation of the Company, whether or not the allegedly lost, stolen, mutilated
      or destroyed Warrant shall be at any time enforceable by anyone.

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	 
	 	
              COLUMBIA
                LABORATORIES, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:
                Robert S. Mills

              Title:
                President and Chief Executive Officer

              Address:    354
                Eisenhower Parkway

                        Livingston,
                New
                Jersey 07039

                        Attention:
                General
                Counsel

                        Facsimile:
                (973)
                994-3001

            
	 	 

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    NOTICE
      OF EXERCISE

     

    TO: COLUMBIA
      LABORATORIES, INC.

     

    (1) The
      undersigned hereby elects to (check one box only):

    

    q purchase
      ________ shares of the Common Stock of Columbia Laboratories, Inc. (the
“Company”)
      pursuant to the terms of the attached Warrant, and tenders herewith payment
      of
      the exercise price in full for such shares, together with all applicable
      transfer taxes, if any.

     

    q purchase
      the number of shares of Common Stock of the Company by cashless exercise
      pursuant to the terms of the Warrant as shall be issuable upon cashless exercise
      of the portion of the Warrant relating to ________ shares, and shall tender
      payment of all applicable transfer taxes, if any.

    

    (2) Please
      issue a certificate or certificates representing said shares of Common Stock
      in
      the name of the undersigned or in such other name as is specified
      below:

    

    ________________________

    (Name)

     

    ________________________

    ________________________

    (Address)

     

    (3) The
      undersigned represents that (i) the aforesaid shares of Common Stock are being
      acquired for the account of the undersigned for investment and not with a view
      to, or for resale in connection with, the distribution thereof and that the
      undersigned has no present intention of distributing or reselling such shares;
      (ii) the undersigned is aware of the Company’s business affairs and financial
      condition and has acquired sufficient information about the Company to reach
      an
      informed and knowledgeable decision regarding its investment in the Company;
      (iii) the undersigned is experienced in making investments of this type and
      has
      such knowledge and background in financial and business matters that the
      undersigned is capable of evaluating the merits and risks of this investment
      and
      protecting the undersigned’s own interests; (iv) the undersigned understands
      that the shares of Common Stock issuable upon exercise of this Warrant have
      not
      been registered under the Securities Act of 1933, as amended (the “Securities
      Act”),
      by
      reason of a specific exemption from the registration provisions of the
      Securities Act, which exemption depends upon, among other things, the bona
      fide
      nature of the investment intent as expressed herein, and, because such
      securities have not been registered under the Securities Act, they must be
      held
      indefinitely unless subsequently registered under the Securities Act or an
      exemption from such registration is available; (v) the undersigned is aware
      that
      the aforesaid shares of Common Stock may not be sold pursuant to Rule 144
      adopted under the Securities Act unless certain conditions are met and until
      the
      undersigned has held the shares for the number of years prescribed by Rule
      144,
      that among the conditions for use of the Rule is the availability of current
      information to the public about the Company and the Company has not made such
      information available and has no present plans to do so; and (vi) the
      undersigned agrees not to make any disposition of all or any part of the
      aforesaid shares of Common Stock unless and until there is then in effect a
      registration statement under the Securities Act covering such proposed
      disposition and such disposition is made in accordance with said registration
      statement, or the undersigned has provided the Company with an opinion of
      counsel satisfactory to the Company, stating that such registration is not
      required.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              (Date)

            	 	 (Signature)
	
            	 	
               

              (Print
                name)

            

    

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    ASSIGNMENT
      FORM

     

    
      
        	
                (To
                  assign the foregoing Warrant, subject to compliance with Section
                  4.3
                  hereof, execute this form and supply required information. Do not
                  use this
                  form to purchase shares.)

              

      

    

     

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

    
      
        	
                Name:
                  

              	 	 
	
              	
                (Please
                  Print)

              	 
	
                Address:
                  

              	 	 
	
              	
                (Please
                  Print)

              	 

      

    

    
Dated:
      __________, 20__

     

    
      
        
          	
                  
                    Holder’s

                    Signature:
                       

                  

                	 	 
	
                	
                   

                	 
	
                  
                    Holder’s

                    Address:
                       

                  

                	 	 
	
                	
                   

                	 

        

      

       

    

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

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