ENTREMED, INC. WARRANT TO PURCHASE COMMON STOCK
Exhibit 4.1
THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
ENTREMED, INC.
WARRANT TO PURCHASE COMMON STOCK
February ___, 2006
Void After February
, 20
THIS CERTIFIES THAT, for value received, [ ], or permitted registered assigns (the
“Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from
EntreMed, Inc., a Delaware corporation (the “Company”) up to [ ] shares of the common stock
of the Company, par value $0.01 per share (the “Common Stock”).
1. DEFINITIONS. As used herein, the following terms shall have the following respective
meanings:
(a) “Exercise Period” shall mean the period commencing with the date that is 180 days after
the date hereof and ending five years from the date hereof, unless sooner terminated as provided
below.
(b) “Exercise Price” shall mean $2.50 per share, subject to adjustment pursuant to Section 5
below.
(c) “Exercise Shares” shall mean the shares of Common Stock issuable upon exercise of this
Warrant.
(d) “Trading Day” shall mean (a) any day on which the Common Stock is listed or quoted and
traded on its primary Trading Market, (b) if the Common Stock is not then listed or quoted and
traded on any Eligible Market, then a day on which trading occurs on the OTC Bulletin Board (or any
successor thereto), or (c) if trading does not occur on the OTC Bulletin Board (or any successor
thereto), any Business Day.
2. EXERCISE OF WARRANT. The rights represented by this Warrant may be exercised in whole or
in part at any time during the Exercise Period, by delivery
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of the following to the Company at its address set forth on the signature page hereto (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, (ii) by cancellation of
indebtedness, or (iii) pursuant to Section 2.1 below; and
(c) This Warrant.
The Holder shall not be required to deliver the original Warrant in order to effect the
exercise hereunder. Execution and delivery of the Notice of Exercise shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Exercise Shares.
Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with the Depository
Trust Company through its Deposit Withdrawal Agent Commission system if the Company is a
participant in such system (and so long as the legend may be removed in accordance with Section 4.1
of the Securities Purchase Agreement dated February 2, 2006, by and among the Company and the
purchasers indicated on the signature pages thereto (the “Purchase Agreement”)), and otherwise by
physical delivery to the address specified by the Holder in the Notice of Exercise within three
business days from the delivery to the Company of the Notice of Exercise, surrender of this Warrant
and payment of the aggregate Exercise Price as set forth above. This Warrant shall be deemed to
have been exercised on the date the Exercise Price is received by the Company. The Exercise Shares
shall be deemed to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of
the date the Warrant has been exercised by payment to the Company of the Exercise Price.
In addition to any other rights available to the Holder, if the Company fails to deliver to
the Holder a certificate representing Exercise Shares by the third Trading Day after the date on
which delivery of such certificate is required by this Warrant, and if after such third Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving
from the Company (a “Buy-In”), then in the Holder’s sole discretion, the Company shall within three
Trading Days after the Holder’s request, either (i) pay cash to the Holder in an amount equal to
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased less the Exercise Price (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Common Stock) shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the
Closing Price on the date of the event giving rise to the Company’s obligation to deliver such
certificate.
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The person in whose name any certificate or certificates for 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 delivery of such certificate or certificates, 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.
To the extent permitted by law, the Company’s obligations to issue and deliver Exercise Shares
in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any person or entity or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other person or entity of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other person or entity, and irrespective
of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection with the issuance of Exercise Shares. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.
2.1. Net Exercise. If during the Exercise Period, the Holder is not permitted to sell
Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and
the fair market value of one share of the 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 or
by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the
value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with the properly endorsed Notice of
Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:
X = Y (A-B)
A
A
Where X = the number of shares of Common Stock to be issued to the Holder
| Y = | the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the date of such calculation) |
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| A = | the fair market value of one share of the Company’s Common Stock (at the date of such calculation) |
| B = | Exercise Price (as adjusted to the date of such calculation) |
For purposes of the above calculation, the “fair market value” of one share of Common Stock
shall mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq
National Market or other trading market where such security is listed or traded as reported by
Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by
the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then
reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading
days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal
trading market for the shares of Common Stock, the average of the reported sales prices reported by
Bloomberg on the principal trading market for the Common Stock during the same period, or, if there
is no sales price for such period, the last sales price reported by Bloomberg for such period, or
(iii) if neither of the foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security as reported by
Bloomberg, or if no sales price is so reported for such security, the last bid price of such
security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date
on any of the foregoing bases, the fair market value shall be as determined by the Board of
Directors of the Company in the exercise of its good faith judgment.
2.2. Issuance of New Warrants. Upon any partial exercise of this Warrant, the Company, at its
expense, will forthwith and, in any event within five business days, issue and deliver to the
Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable,
in the aggregate, for the balance of the number of shares of Common Stock remaining available for
purchase under the Warrant.
2.3. Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp or
similar tax which may be payable in respect of any transfer involved in the issuance of, and the
preparation and delivery of certificates (if applicable) representing, (i) any Exercise Shares
purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s
name or the name of any transferee of all or any portion of this Warrant.
2.4. Exercise Limitations; Holder’s Restrictions. A Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after
giving effect to such issuance after exercise, such Holder (together with such Holder’s
affiliates), as set forth on the applicable Notice of Exercise, would beneficially own in excess of
4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
such issuance. For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by such Holder and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock which would be
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issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially
owned by such Holder or any of its affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any
other shares of Common Stock or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2.4,
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it
being acknowledged by a Holder that the Company is not representing to such Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely
responsible for any schedules required to be filed in accordance therewith. To the extent that
the limitation contained in this Section 2.4 applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder) and of which a portion of this
Warrant is exercisable shall be in the sole discretion of a Holder, and the submission of a Notice
of Exercise shall be deemed to be each Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder) and of which portion of this
Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the
Company shall have no obligation to verify or confirm the accuracy of such determination. For
purposes of this Section 2.4, in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by such Holder or its affiliates since the date
as of which such number of outstanding shares of Common Stock was reported. The provisions of this
Section 2.4 may be waived by such Holder, at the election of such Holder, upon not less than 61
days’ prior notice to the Company, and the provisions of this Section 2.4 shall continue to apply
until such 61st day (or such later date, as determined by such Holder, as may be specified in such
notice of waiver).
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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 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 to such number of shares
as shall be sufficient for such purposes.
3.2. No Impairment. Except and to the extent as waived or consented to by the Holder, the
Company will not, by amendment of its Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all such action as may be
necessary or appropriate in order to protect the exercise rights of the Holder against impairment.
3.3. Notices of Record Date and Certain Other Events. 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 20 days prior to the date on which any such record is to be taken for the
purpose of such dividend or distribution, a notice specifying such date. In the event of any
voluntary dissolution, liquidation or winding up of the Company, the Company shall mail to the
Holder, at least 20 days prior to the date of the occurrence of any such event, a notice specifying
such date. In the event the Company authorizes or approves, enters into any agreement
contemplating, or solicits stockholder approval for any Fundamental Transaction, as defined in
Section 7 herein, the Company shall mail to the Holder, at least twenty days prior to the date of
the occurrence of such event, a notice specifying such date.
4. REPRESENTATIONS OF HOLDER.
4.1. Acquisition of Warrant for Personal Account. The Holder represents and warrants that it
is acquiring the Warrant solely for its account and not with a view to or for sale or distribution
of said Warrant or any part thereof. The Holder also represents that the entire legal and
beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired
for, and will be held for, its account only.
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4.2. Securities Are Not Registered.
(a) The Holder understands that the Warrant and the Exercise Shares have not been registered
under the Securities Act of 1933, as amended (the “Act”) on the basis that no distribution or
public offering of the stock of the Company is to be effected. The Holder realizes that the basis
for the exemption 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 has no such present intention except as set
forth in Article 6 of the Purchase Agreement.
(b) The Holder recognizes that the Warrant and the Exercise Shares must be held indefinitely
unless they are subsequently registered under the Act or an exemption from such registration is
available. The Holder recognizes that the Company will register the Exercise Shares pursuant to
the provisions of Article 6 of the Purchase Agreement.
(c) The Holder is aware that neither the Warrant nor the Exercise Shares may be sold pursuant
to Rule 144 adopted under the 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.
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) There is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with said registration statement; or
(ii) 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 Act or any applicable state securities
laws; provided, however, that no such opinion of counsel shall be required for sales or transfers
(a) under Rule 144, (b) to one of its nominees, affiliates or a nominee thereof, (c) to a pension
or profit-sharing fund established and maintained for its employees or for the employees of any
affiliate, (d) from a nominee to any of the aforementioned persons as beneficial owner of this
Warrant or such Exercise Shares or (e) to a qualified institutional buyer, so long as such transfer
is effected in compliance with Rule 144A under the Securities Act.
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(b) The Holder understands and agrees that, subject to Section 4.1 of the Purchase Agreement,
all certificates evidencing the shares to be issued to the Holder may bear the following legend:
“[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.”
5. ADJUSTMENT OF EXERCISE PRICE AND SHARES.
(a) In the event of changes in the outstanding Common Stock of the Company by reason of stock
dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, consolidation, acquisition of the Company (whether
through merger or acquisition of substantially all the assets or stock of the Company), or the
like, the number, class and type 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 type of shares or other property 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 the event requiring adjustment. The form of this Warrant need
not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.
(b) If at any time or from time to time the holders of Common Stock of the Company (or any
shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall
have received or become entitled to receive, without payment therefor,
(i) Common Stock or any shares of stock or other securities which are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe
for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution
(other than a dividend or distribution covered in Section 5(a) above),
(ii) any cash paid or payable otherwise than as a cash dividend or
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(iii) Common Stock or additional stock or other securities or property (including cash) by way
of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement
(other than shares of Common Stock pursuant to Section 5(a) above), then and in each such case, the
Holder hereof will, upon the exercise of this Warrant, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property (including cash in
the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of
such exercise had such Holder been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares or all other
additional stock and other securities and property.
(c) Upon the occurrence of each adjustment pursuant to this Section 5, the Company at its
expense will, at the written request of the Holder, promptly compute such adjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Exercise Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s transfer agent.
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 then current fair market value of an Exercise Share by such
fraction.
7. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger of the Company with or into another entity, (ii) the Company effects any
sale of all or substantially all of its assets in one or a series of related transactions, (iii)
any tender offer or exchange offer (whether by the Company or another individual or entity) is
completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property or (iv) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by Section 5 above) (in any such case,
a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder,
(a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or
acquiring corporation or of
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the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event. For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one
share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing
provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.
The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the provisions of this
Section 7 and insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
8. 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.
9. TRANSFER OF WARRANT. Subject to applicable laws and the restriction on transfer set forth
on the first page of this Warrant and set forth in the Purchase Agreement, 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 reasonably
satisfactory to the Company and its counsel.
10. 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.
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 telex or facsimile if sent during normal business
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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 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 hereto and to Holder at the applicable address set forth on the
applicable signature page to the Purchase Agreement or at such other address as the Company or
Holder may designate by 10 days advance written notice to the other parties 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized
officer as of February ___, 2006.
| ENTREMED, INC. | ||||
| By: | ||||
| Name: Xxxxx X. Xxxxx | ||||
| Title: President & Chief Executive Officer | ||||
| 0000 Xxxxxxx Xxxxxx Xxxxx |
||||
| Xxxxxxxxx, XX 00000 | ||||
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NOTICE OF EXERCISE
TO: ENTREMED, INC.
(1) o The undersigned hereby elects to purchase shares of the Common Stock
of ENTREMED, INC. (the “Company”) pursuant to the terms of the attached Warrant, and tenders
herewith payment of the exercise price in full, together with all applicable transfer taxes, if
any.
o The undersigned hereby elects to purchase shares of Common Stock of the
Company pursuant to the terms of the net exercise provisions set forth in Section 2.1 of the
attached Warrant, and shall tender payment of all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing said shares of Common Stock of the
Company 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 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, other than as contemplated by Article 6 of the Securities Purchase Agreement
dated as of February ___, 2006, by and among the Company and the purchasers named therein (the
“Purchase Agreement”); (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 (except
to the extent a registration statement pursuant to and as contemplated by Article 6 of the Purchase
Agreement is effective) 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
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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 (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 upon the Company’s reasonable request, an opinion of
counsel satisfactory to the Company, stating that such registration is not required.
| (Date) | (Signature) |
(Print
name)
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ASSIGNMENT FORM
(To assign the foregoing Warrant, 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: |
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Address: |
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Dated:
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, 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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