SECURITIES PURCHASE AGREEMENT
Exhibit
10.1
This
Securities Purchase Agreement (this “Agreement”) is dated
as of September 7, 2010, between EntreMed, Inc., a Delaware corporation (the
“Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and
collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
an effective registration statement under the Securities Act of 1933, as amended
(the “Securities
Act”), the Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:
ARTICLE
I.
DEFINITIONS
1.1
Definitions. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.
“Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.
“Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the third Trading Day following
the date hereof.
“Commission” means the
United States Securities and Exchange Commission.
“Common Stock” means
the common stock of the Company, par value $0.01 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed.
“Per Share Purchase
Price” equals $2.70, subject to adjustment for reverse and forward stock
splits, stock dividends, stock combinations and other similar transactions of
the Common Stock that occur after the date of this Agreement.
“Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.
“Prospectus” means the
final prospectus filed for the Registration Statement.
“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule
424(b) of the Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at the Closing.
“Registration
Statement” means the effective registration statement with Commission
file No. 333-161100 which registers the sale of the Shares, the Warrants and the
Warrant Shares by the Purchasers.
“Rule 424” means Rule
424 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Securities” means the
Shares, the Warrants and the Warrant Shares.
“Shares” means the
shares of Common Stock issued or issuable to each Purchaser pursuant to this
Agreement.
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares and
Warrants purchased hereunder as specified below such Purchaser’s name on the
signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“Trading Day” means a
day on which the principal Trading Market is open for trading.
“Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the Nasdaq Capital Market, the
Nasdaq Global Market, the Nasdaq Global Select Market, the NYSE AMEX or the New
York Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Warrants and any other documents or
agreements executed in connection with the transactions contemplated
hereunder.
“Transfer Agent” means
American Stock Transfer & Trust Company, the current transfer agent of the
Company, and any successor transfer agent of the Company.
“Warrants” means,
collectively, the Common Stock purchase warrants delivered to the Purchasers at
the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be
exercisable 181 days from the date hereof and have a term of exercise equal to
three years from the date of exercise, in the form of Exhibit A attached
hereto.
“Warrant Shares” means
the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE
II.
PURCHASE
AND SALE
2.1 Closing. On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $5,100,000 of Shares
and Warrants. The Shares and Warrants will be sold together as units,
each unit consisting of one shares of Common Stock and a Warrant to purchase
0.20 shares of Common Stock. Each Purchaser shall deliver to the
Company, via wire transfer of immediately available funds, the amount equal to
such Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser and the Company shall deliver to each Purchaser its
respective Shares and a Warrant as determined pursuant to Section 2.2(a), and
the Company and each Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at 10:00 a.m. at the offices of Xxxxxx & Xxxxxx LLP, 000 Xxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 or such other location as the parties shall
mutually agree.
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2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
Warrant registered in the name of such Purchaser to purchase the number of
shares of Common Stock set forth in such Warrant, with an exercise price equal
to $2.825 subject to adjustment therein (such Warrant certificate may be
delivered within three Trading Days of the Closing Date); and
(iii) the
Prospectus and Prospectus Supplement (which may be delivered in accordance with
Rule 172 under the Securities Act).
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii)
such Purchaser’s Subscription Amount by wire transfer to the account as
specified in writing by the Company or by delivery of immediately available
funds.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:
(i) the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Purchasers contained herein (unless as of a specific date
therein);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this
Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the
Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed; and
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement.
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ARTICLE
III.
REPRESENTATIONS,
WARRANTIES AND COVENANTS
3.1 Representations and
Warranties of the Company. The Company hereby represents,
warrants and covenants to each Purchaser as follows:
(a) The
issuance and sale of each of the Shares and the Warrants have been duly
authorized by the Company, and the Shares, when issued and paid for in
accordance with this Agreement, will be duly and validly issued, fully paid and
nonassessable. The Warrant Shares have been duly authorized and
reserved for issuance pursuant to the terms of the Warrants, and the Warrant
Shares, when issued by the Company upon valid exercise of the Warrants and
payment of the exercise price, will be duly and validly issued, fully paid and
nonassessable.
(b) Each
of this Agreement and the Warrants constitutes a valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms,.
(c) The
Company will use its commercially reasonable efforts to maintain the
effectiveness of the Registration Statement in accordance with the rules and
regulations promulgated by the Commission.
(d) As
of the Closing Date, the Company shall have duly authorized and reserved for
issuance a number of shares of Common Stock which equals the number of
Warrants. The Company shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued capital stock, solely for the purpose of
effecting the exercise of the Warrants, all of the number of Warrant
Shares.
(e) Within
one Business Day of the Closing, the Company shall deliver irrevocable
instructions to the Transfer Agent instructing the Transfer Agent to deliver via
the Depository Trust Company Deposit Withdrawal Agent Commission System (“DWAC”), of if
requested, by physical stock certificate as soon as practicable, that number of
Shares equal to such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser.
3.2 Representations and
Warranties of the Purchasers. Each Purchaser, for itself and
for no other Purchaser, hereby represents and warrants as follows:
(a) Such
Purchaser has received the Company’s base prospectus relating to the Securities
and the prospectus supplement dated the date hereof. Such Purchaser
acknowledges that such Purchaser has received certain additional information
regarding the Offering, including pricing information (the “Offering
Information”). Such Offering Information may be provided to
the Purchaser by any means permitted under the Securities Act, including through
a prospectus supplement, a free writing prospectus or oral
communications.
(b) Such
Purchaser has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and this Agreement constitutes a valid and binding obligation of
such Purchaser enforceable against such Purchaser in accordance with its
terms.
(c) Such
Purchaser understands that nothing in the Registration Statement, the base
prospectus, the Offering Information and any amendments or supplements thereto,
this Agreement or any other materials presented to such Purchaser in connection
with the purchase and sale of the Securities constitutes legal, tax or
investment advice. Such Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Securities.
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ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Board of
Directors. The Company shall use its best efforts to
take all action necessary in accordance with the Delaware General Corporation
Law, applicable Trading Market rules, its Certificate of Incorporation and its
Amended and Restated Bylaws, and shall use its best efforts to take all other
actions necessary in connection with the rights granted under this Section 4.1,
to ensure that the Purchasers shall have the right to designate one individual
to serve as a member of the Company’s Board of Directors (the “Purchaser
Designee”). The Purchaser Designee will be named by Selected
Value Therapeutics GP, LLC and be acceptable to the Company. In lieu
of a board seat, Selected Value Therapeutics GP, LLC may instead elect, at its
option, to designate an observer to the Board (the “Purchaser
Observer”). Such Purchaser Observer may attend, in person, as
an observer, all meetings held in person and participate in telephonic meetings
of the Board of Directors of the Company, provided that such Purchaser Observer
shall not be entitled to vote on any matter brought to a vote at any such
meeting. The Company reserves the right to withhold any information
and to exclude such Purchaser Observer from any meeting, or any portion thereof,
as is reasonably determined by the Chairman of the Board or a majority of the
members of the Board of Directors or any committee thereof (in the case of
committee meetings) to be necessary for purposes of confidentiality, competitive
factors, attorney-client privilege or other reasonable purposes (at the sole
discretion of the Chairman of the Board or a majority of the members of the
Board of Directors or a majority of the members of any committee, with respect
to a meeting of such committee, as applicable).
4.2 Warrant
Shares. If at any time following the date hereof the
Registration Statement (or any subsequent registration statement registering the
exercise of the Warrant Shares) is not effective or is not otherwise available
for the sale or resale of the Warrant Shares, the Company shall immediately
notify the holders of the Warrants in writing that such registration statement
is not then effective and thereafter shall promptly notify such holders when the
registration statement is again effective. The Company shall use
commercially reasonable efforts to keep a registration statement (including the
Registration Statement) registering the issuance of the Warrant Shares effective
during the term of the Warrants.
4.3 Use of
Proceeds. The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and as set forth in the
Prospectus Supplement.
4.4 Listing of Common
Stock. The Company hereby agrees to use best efforts to maintain the
listing or quotation of the Common Stock on the Trading Market on which it is
currently listed, and concurrently with the Closing, the Company shall apply to
list or quote all of the Shares and Warrant Shares on such Trading Market and
promptly secure the listing of all of the Shares and Warrant Shares on such
Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will then include in such
application all of the Shares and Warrant Shares, and will take such other
action as is necessary to cause all of the Shares and Warrant Shares to be
listed or quoted on such other Trading Market as promptly as
possible. The Company will then take all action reasonably necessary
to continue the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market.
ARTICLE
V.
MISCELLANEOUS
5.1 Fees and
Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement; provided, however, that the Company
shall reimburse Selected Value Therapeutics GP, LLC for its reasonable expenses
up to a maximum of $3,000, and agrees to reimburse the Purchasers for their
financial advisory expenses equal to 5% of the aggregate purchase price of the
Securities purchased pursuant to this Agreement. The Company shall
pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in
connection with the delivery of any Securities to the Purchasers.
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5.2 Entire
Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, the Prospectus and the Prospectus Supplement,
contain the entire understanding of the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
5.3 Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd)
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.
5.4 Amendments;
Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchasers holding at least 67% in
interest of the Shares then outstanding or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is
sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.
5.5 Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
5.6 Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of each Purchaser (other
than by merger). Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers
any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction
Documents that apply to the “Purchasers.”
5.7 No Third-Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.
5.8 Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.
5.9 Survival. The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.
5.10 Execution. 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. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.
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5.11 Severability. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
5.12 Replacement of
Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.
5.13 Independent Nature of
Purchasers’ Obligations and Rights. The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or
in any other Transaction Document, 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
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to
independently protect and enforce its rights including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. The Company has
elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by any of the Purchasers.
5.14 Saturdays, Sundays,
Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.
5.15 Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.
5.16 WAIVER OF JURY
TRIAL. IN ANY ACTION, SUIT, OR
PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
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IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.
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ENTREMED,
INC.
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By:_____________________________
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Name: Xxxxxxx X. Xxxxxx
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Title: Executive Chairman
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Address
for notice:
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0000
Xxxxxxx Xxxxxx Xxxxx
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Xxxxxxxxx,
Xxxxxxxx 00000
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Attention: General
Counsel & Secretary
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Facsimile: 240.864.2601
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With
a copy to (which shall not constitute notice):
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Xxxxxxx
X. Xxxxx
Xxxxxx
& Xxxxxx LLP
000
00xx
Xx., X.X.
Xxxxxxxxxx,
X.X. 00000
Facsimile: 202.942.5999
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
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[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
Name of
Purchaser: ________________________________________________________
Signature
of Authorized Signatory of Purchaser:
_________________________________
Name of
Authorized Signatory:
_______________________________________________
Title of
Authorized Signatory:
________________________________________________
Facsimile
Number of Authorized Signatory:
__________________________________________
Address
for Notice of Purchaser:
Address
for Delivery of Securities (Warrants) for Purchaser (if not same as address for
notice):
Subscription
Amount: $_________________
Shares:
_________________
Warrant
Shares: __________________
Brokerage
Account Name and Account Number (for delivery of shares via DWAC):
___________________________________________
Name of
Brokerage Firm or Agent To Receive Shares
______________________
Account
Name
______________________
Account
No.
______________________
DTC
No.
9
