WHARTON CAPITAL MARKETS LLC
Exhibit
1.1
XXXXXXX
CAPITAL MARKETS LLC
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February
3, 2010
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CONFIDENTIAL
EntreMed,
Inc.
0000
Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
Attn:
Xxxxxxx X. Xx
Gentlemen:
This
letter (the “Agreement”) constitutes the agreement between EntreMed, Inc. (the
“Company”) and Xxxxxxx Capital Markets LLC (“Xxxxxxx” or the “Placement Agent”),
pursuant to which Xxxxxxx shall serve as the exclusive placement agent (the
“Services”) for the Company, on a “best-efforts” basis, in connection with the
proposed offer and placement (the “Offering”) of securities of the Company (the
“Securities”) pursuant to a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the “Securities Act”) and Rule 415(a)(1)(x)
thereunder, including shares (the “Shares”) of the Company’s common stock (the
“Common Stock”), and, to the extent included in the Offering, warrants to
purchase shares of Common Stock. The Placement Agent shall introduce prospective
purchasers, their associates and affiliates, pre-approved by the Company
(collectively, the “Investors”) to the Company in connection with the purchase
or financing of up to $10 Million of the Company’s Securities. The terms of the
Offering and the Securities shall be mutually agreed upon by the Company and the
Investors in the Offering, and nothing herein implies that Xxxxxxx would have
the power or authority to bind the Company or obligate the Company to issue any
Securities or complete the Offering. The Company expressly acknowledges and
agrees that Xxxxxxx’x obligations hereunder are on a reasonable best-efforts
basis only and that the execution of this Agreement does not constitute a
commitment by Xxxxxxx to purchase the Securities and does not ensure the
successful placement of the Securities or any portion thereof by
Xxxxxxx.
SECTION 1
.. FEES AND EXPENSES
..
In
connection with the Services described above, the Company agrees to pay to
Xxxxxxx the following:
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A.
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Placement Agent’s
Fee . The Company shall pay to Xxxxxxx a cash placement
fee (the “Placement Agent’s Fee”) equal to 6% of the aggregate gross
proceeds of the Securities actually sold in the Offering. The Placement
Agent’s Fee shall be payable by wire transfer to Xxxxxxx immediately upon
the closing of the Offering (the
“Closing”).
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000
xxxxxxx xxxxxx – 40 th fl. –
xxx Xxxx, xx 00000 – O 000-000-0000 f
000-000-0000
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B.
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Expenses. In
addition to any fees payable to Xxxxxxx hereunder, the Company agrees to
reimburse Xxxxxxx for all reasonable out-of-pocket expenses incurred and
documented by Xxxxxxx in connection with its engagement hereunder,
including the reasonable fees of Xxxxxxx’x counsel, but in no event more
than $10,000 without the prior written approval of the Company. Such
reimbursement shall be payable immediately upon the Closing of the
Offering (but only in the event of a Closing) from the gross proceeds of
the Securities sold.
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SECTION 2
.. TERM OF
ENGAGEMENT.
The
term of Xxxxxxx’x engagement will begin on the date hereof and end on the
earlier of the consummation of the Offering or March 3, 2010. Notwithstanding
anything to the contrary contained herein, the provisions concerning
confidentiality, indemnification, contribution, and the Company’s obligations to
pay fees and to reimburse expenses actually incurred pursuant to Section 1
hereof, will survive any expiration or termination of this
Agreement.
SECTION 3
.. FEE TAIL
..
The
Placement Agent’s Fee and expense reimbursements provided above shall be due and
payable to Xxxxxxx irrespective of whether the Investors consummate the Offering
during the term of this Agreement or thereafter. In addition, the Placement
Agent shall be entitled to a Placement Agent’s Fee, calculated and distributed
in the manner provided in Section 1 hereof, with respect to any future public or
private offering or other financing or capital raising transaction of any kind
provided to the Company by the Investors at any time within the 12-month period
following the expiration or termination of this Agreement.
SECTION 4
.. USE OF INFORMATION
..
The
Company will furnish Xxxxxxx such written information as Xxxxxxx reasonably
requests in connection with the performance of its Services hereunder. The
Company understands, acknowledges and agrees that, in performing its Services
hereunder, Xxxxxxx will use and rely upon such information as well as publicly
available information regarding the Company and that Xxxxxxx does not assume
responsibility for independent verification of the accuracy or completeness of
any information, whether publicly available or otherwise furnished to it,
concerning the Company or otherwise relevant to the Offering, including, without
limitation, any financial information, forecasts or projections considered by
Xxxxxxx in connection with the provision of its Services. Xxxxxxx agrees not to
use any confidential information concerning the Company provided to Xxxxxxx by
the Company for any purposes other than those contemplated under this
Agreement.
SECTION 5 .
NEWS
RELEASES/ANNOUNCEMENTS .
The
Company agrees not to issue any press releases relating to the Offering, or
place any “tombstone” advertisements in financial newspapers or other financial
journals, without the prior review of Xxxxxxx and without mentioning that
Xxxxxxx is acting, or has acted, as exclusive placement agent for the
Offering.
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SECTION 6
.. REPRESENTATIONS AND
WARRANTIES.
The
Company represents and warrants to, and agrees with, the Placement Agent
that:
(A) The
Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-3 (Registration File No. 333-161100) under
the Securities Act of 1933, as amended (the “Securities Act”), which became
effective on October 9, 2009, for the registration of the Shares under the
Securities Act. At the time of such filing, the Company met the requirements of
Form S-3 under the Securities Act. Such registration statement meets the
requirements set forth in Rule 415 (a)(1)(x) under the Securities Act and
complies with said Rule. The Company will file with the Commission pursuant to
Rule 424(b) under the Securities Act, and the rules and regulations (the “Rules
and Regulations”) of the Commission promulgated thereunder, a supplement to the
form of prospectus included in such registration statement relating to the
placement of the Shares and the plan of distribution thereof. Such registration
statement, including the exhibits thereto, as amended at the date of this
Agreement, is hereinafter called the “Registration Statement”, such prospectus
in the form in which it appears in the Registration Statement is hereinafter
called the “Base Prospectus”; and the supplemented form of prospectus, in the
form in which it will be filed with the Commission pursuant to Rule 424(b)
(including the Base Prospectus as so supplemented) is hereinafter called the
“Prospectus Supplement”.
(B) The
Registration Statement (and any further documents to be filed with the
Commission) contains all exhibits and schedules as required by the Securities
Act. Each of the Registration Statement and any post-effective
amendment thereto, at the time it became effective, and the Base Prospectus and
Prospectus Supplement, complied and complies in all material respects with the
Securities Act and the Exchange Act and the applicable Rules and Regulations
thereunder, and did not and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements there in not
misleading. There are no documents required to be filed with the Commission in
connection with the transaction contemplated hereby that (x) have not been filed
as required pursuant to the Securities Act, or (y) will not be filed within the
requisite time period.
SECTION 7
.. INDEMNIFICATION
..
A. In
connection with the Company’s engagement of Xxxxxxx as Placement Agent, the
Company hereby agrees to indemnify and hold harmless Xxxxxxx and its affiliates,
and the respective controlling persons, directors, officers, shareholders,
agents and employees of any of the foregoing (collectively, the “Indemnified
Persons”), from and against any and all claims, actions, suits, proceedings
(including those of shareholders), damages, liabilities and expenses incurred by
any of them (including the reasonable fees and expenses of counsel), as incurred
(collectively a “Claim”), that are (i) related to or arise out of (a) any
actions taken or omitted to be taken (including any untrue statements made or
any statements omitted to be made) by the Company, or (b) any actions taken or
omitted to be taken by any Indemnified Person in connection with the Company’s
engagement of Xxxxxxx, or (ii) otherwise relate to or arise out of Xxxxxxx’x
activities on the Company’s behalf under Xxxxxxx’x engagement, and the Company
shall reimburse any Indemnified Person for all expenses (including the
reasonable fees and expenses of counsel) as incurred by such Indemnified Person
in connection with investigating, preparing or defending any such claim, action,
suit or proceeding, whether or not in connection with pending or threatened
litigation in which any Indemnified Person is a party. The Company will not,
however, be responsible for any Claim that is finally judicially determined to
have resulted from the gross negligence or willful misconduct of any person
seeking indemnification for such Claim. The Company further agrees that no
Indemnified Person shall have any liability to the Company for or in connection
with the Company’s engagement of Xxxxxxx except for any Claim incurred by the
Company as a result of such Indemnified Person’s gross negligence or willful
misconduct.
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B. The
Company further agrees that it will not, without the prior written consent of
Wharton, settle, compromise or consent to the entry of any judgment in any
pending or threatened Claim in respect of which indemnification may be sought
hereunder (whether or not any Indemnified Person is an actual or potential party
to such Claim), unless such settlement, compromise or consent includes an
unconditional, irrevocable release of each Indemnified Person from any and all
liability arising out of such Claim.
C. Promptly
upon receipt by an Indemnified Person of notice of any complaint or the
assertion or institution of any Claim with respect to which indemnification is
being sought hereunder, such Indemnified Person shall notify the Company in
writing of such complaint or of such assertion or institution but failure to so
notify the Company shall not relieve the Company from any obligation it may have
hereunder, except and only to the extent such failure results in the forfeiture
by the Company of substantial rights and defenses. If the Company so elects or
is requested by such Indemnified Person, the Company will assume the defense of
such Claim, including the employment of counsel reasonably satisfactory to such
Indemnified Person and the payment of the fees and expenses of such counsel. In
the event, however, that legal counsel to such Indemnified Person reasonably
determines that having common counsel would present such counsel with a conflict
of interest or if the defendant in, or target of, any such Claim, includes an
Indemnified Person and the Company, and legal counsel to such Indemnified Person
reasonably concludes that there may be legal defenses available to it or other
Indemnified Persons different from or in addition to those available to the
Company, then such Indemnified Person may employ its own separate counsel to
represent or defend him, her or it in any such Claim and the Company shall pay
reasonable fees and expenses of such counsel. Notwithstanding anything herein to
the contrary, if the Company fails timely or diligently to defend, contest, or
otherwise protect against any Claim, the relevant Indemnified Party shall have
the right, but not the obligation, to defend, contest, compromise, settle,
assert cross claims or counterclaims, or otherwise protect against the same, and
shall be fully indemnified by the Company therefor, including, without
limitation, for the reasonable fees and expenses of its counsel and all amounts
paid as a result of such Claim or the compromise or settlement thereof. In
addition, with respect to any Claim in which the Company assumes the defense,
the Indemnified Person shall have the right to participate in such Claim and to
retain his, her or its own counsel therefor at his, her or its own
expense.
D. The
Company agrees that if any indemnity sought by an Indemnified Person hereunder
is held by a court to be unavailable for any reason (whether or not Xxxxxxx is
the Indemnified Person), then the Company and Xxxxxxx shall contribute to the
Claim for which such indemnity is held unavailable in such proportion as is
appropriate to reflect the relative benefits to the Company, on the one hand,
and Xxxxxxx on the other, in connection with Xxxxxxx’x engagement referred to
above, subject to the limitation that in no event shall the amount of Xxxxxxx’x
contribution to such Claim exceed the amount of cash fees actually received by
Xxxxxxx from the Company pursuant to Xxxxxxx’x engagement. The Company hereby
agrees that the relative benefits to the Company, on the one hand, and Xxxxxxx
on the other, with respect to Xxxxxxx’x engagement shall be deemed to be in the
same proportion as (i) the total value paid or proposed to be paid or received
by the Company or its stockholders, as the case may be, pursuant to the Offering
(whether or not consummated) for which Xxxxxxx is engaged to render Services
bears to (ii) the total cash fee paid or proposed to be paid to Xxxxxxx in
connection with such engagement.
E. The
Company’s indemnity, reimbursement and contribution obligations under this
Agreement (i) shall be in addition to, and shall in no way limit or otherwise
adversely affect any rights that any Indemnified Party may have at law or
equity, and (ii) shall be effective whether or not the Company is at fault in
any way.
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SECTION 8
.. LIMITATION OF ENGAGEMENT TO
THE COMPANY .
The
Company acknowledges that Xxxxxxx has been retained only by the Company, that
Xxxxxxx is providing Services hereunder as an independent contractor (and not in
any fiduciary or agency capacity) and that the Company’s engagement of Xxxxxxx
is not deemed to be on behalf of, and is not intended to confer rights upon, any
shareholder, owner, or partner of the Company or any other person not a party
hereto as against Xxxxxxx or any of its affiliates, or any of its or their
respective officers, directors, controlling persons, employees or agents. The
Company acknowledges that any recommendation or advice, written or oral, given
by Xxxxxxx to the Company in connection with Xxxxxxx’x engagement is intended
solely for the benefit and use of the Company’s management and directors in
considering a possible Offering, and any such recommendation or advice is not on
behalf of, and shall not confer any rights or remedies upon, any other person or
be used or relied upon for any other purpose.
SECTION 9
.. LIMITATION OF XXXXXXX’X
LIABILITY TO THE COMPANY .
Xxxxxxx
and the Company further agree that neither Xxxxxxx nor any of its affiliates or
any of their respective officers, directors, controlling persons employees or
agents shall any liability to the Company, its security holders or creditors, or
any person asserting claims on behalf of or in the right of the Company (whether
direct or indirect, in contract, tort, for an act of negligence or otherwise)
for any losses, fees, damages, liabilities, costs, expenses or equitable relief
arising out of or relating to this Agreement or the Services rendered hereunder,
except for losses, fees, damages, liabilities, costs or expenses that arise out
of or are based on any action of or failure to act by Xxxxxxx and that are
finally judicially determined to have resulted solely from the gross negligence
or willful misconduct of Xxxxxxx.
SECTION 10
.. CLOSING
..
The
obligations of the Placement Agent and the Investors, and the closing of the
sale of the Securities hereunder, are subject to each of the following terms and
conditions:
(A) No
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the Commission.
(B) All
corporate proceedings and other legal matters incident to the authorization,
form, execution, delivery and validity of each of this Agreement, the
Securities, the Registration Statement, the Base Prospectus and the Prospectus
Supplement and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent.
(C) No
action shall have been taken and no statute, rule, regulation or order shall
have been enacted, adopted or issued by any governmental agency or body which
would, as of the Closing Date, prevent the issuance or sale of Securities or
materially and adversely affect or potentially and adversely affect the business
or operations of the Company; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale
of the Securities or materially and adversely affect or potentially and
adversely affect the business or operations of the Company.
(D) The
Company shall have prepared and filed with the Commission a Current Report on
Form 8-K with respect to the Offering, including as an exhibit thereto this
Agreement.
(E) FINRA
shall have raised no objection to the fairness and reasonableness of the terms
and arrangements of this Agreement. The Company shall make an Issuer Filing with
FINRA pursuant to FINRA Rule 5110 with respect to the Registration Statement and
pay all filing fees in connection therewith.
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(F)
Prior to the Closing Date, the Company shall have furnished to the Placement
Agent such further information, certificates and documents as the Placement
Agent may reasonably request, including an opinion of outside counsel to the
Company, addressed to the Placement Agent, in form and substance reasonably
satisfactory to the Placement Agent.
SECTION 11
.. GOVERNING LAW
..
This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York applicable to agreements made and to be fully performed
therein. Any disputes that arise under this Agreement, even after termination of
this Agreement, shall be heard only in the state or federal courts located in
the County of New York, State of New York. The parties hereto expressly agree to
submit themselves to the jurisdiction of the foregoing courts and expressly
waive any rights they may have to contest the jurisdiction, venue or authority
of such courts. In the event of the bringing of any action, or suit by a party
hereto against the other party hereto, arising out of or relating to this
Agreement, the party in whose favor the final judgment or award shall be entered
shall be entitled to have and recover from the other party the costs and
expenses incurred in connection therewith, including its reasonable attorneys’
fees. Any rights to trial by jury with respect to any such action, proceeding or
suit are hereby waived by Xxxxxxx and the Company.
SECTION 12
.. NOTICES
..
All
notices hereunder shall be in writing and sent by certified mail, hand delivery,
overnight delivery or fax, if sent to the parties at their respective addresses
or fax numbers set forth on the signature page hereto. Notices sent by certified
mail shall be deemed received five days after mailing, notices sent by hand
delivery or overnight delivery shall be deemed received on the date of the
relevant written record of receipt, and notices delivered by facsimile
transmission shall be deemed received as of the date and time printed on the
facsimile transmission receipt.
SECTION 13
.. MISCELLANEOUS
..
This
Agreement embodies the entire agreement and understanding between the parties
hereto, and supersedes all prior agreements and understandings relating to the
subject matter hereof. This Agreement may not be assigned by either party
without the prior written consent of the other party. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. If any provision of this Agreement is
determined to be invalid or unenforceable in any respect, such determination
will not affect such provision in any other respect or any other provision of
this Agreement, which will remain in full force and effect. This
Agreement may not be amended or otherwise modified or waived except by an
instrument in writing signed by both the Company and Xxxxxxx. The
representations, warranties, agreements and covenants contained herein shall
survive the closing of the Offering and delivery and/or exercise of the
Securities, as applicable. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. Facsimile or electronic
signatures shall create a valid and binding obligation of the party executing
the Agreement (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or electronic signature page were an
original thereof.
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Please
confirm that the foregoing correctly sets forth our agreement by signing and
returning to Xxxxxxx a copy of this Agreement.
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Very
truly yours,
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XXXXXXX
CAPITAL MARKETS LLC
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By:
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/s/ Xxxxxx Xxxxxx
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Name:
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Xxxxxx
Xxxxxx
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Title:
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President
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Address for notice:
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Xxxxxxx
Capital Markets LLC
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000
Xxxxxxx Xxxxxx, 00xx Xxxxx
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Xxx
Xxxx, XX, 00000
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Fax
(000) 000-0000
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Attention:
General Counsel
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Accepted
and Agreed to as of
the date
first written above:
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By:
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/s/ Xxxxxxx X. Xx
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Name:
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Xxxxxxx
X. Xx
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Title:
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Chief
Executive Officer, General Counsel &
Secretary
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Address for notice
:
0000
Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx,
XX 00000
Fax (000)
000-0000
Attention: COO
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