Exhibit 10.2

 

CYCLACEL PHARMACEUTICALS, INC.

 

SECURITIES EXCHANGE AGREEMENT

 

MARCH 27, 2012

 

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CYCLACEL PHARMACEUTICALS, INC.

 

SECURITIES EXCHANGE AGREEMENT

 

This Securities Exchange Agreement (this “Agreement”) is made as of March 27,
2013 (the “Effective Date”) by and between CYCLACEL PHARMACEUTICALS, INC., a
Delaware corporation (the “Company”), and TANG CAPITAL PARTNERS, LP, a Delaware
limited partnership (the “Preferred Holder”).

 

RECITALS

 

WHEREAS, the Preferred Holder wishes to exchange an aggregate of 375,457 shares
of the Company’s 6% Convertible Exchangeable Preferred Stock (collectively, the
“Preferred Stock”), such shares constituting all of the Preferred Holder’s
shares of Preferred Stock.

 

WHEREAS, the Company wishes to issue to the Preferred Holder, pursuant to the
exemption from registration provided by Section 3(a)(9) (“Section 3(a)(9)”)
under the Securities Act of 1933, as amended (the “Securities Act”), 765,198
shares of the Company’s common stock, par value $0.001 per share (the “Common
Stock”), in exchange for the Preferred Stock (the “Exchange”) and to cancel the
Preferred Stock upon the terms and conditions set forth herein.

 

WHEREAS, as a condition to the execution of this Agreement, and as an inducement
to the Company to the enter into this Agreement, each of the Preferred Holder
and the Company have entered into a letter agreement (the “Letter Agreement”),
dated as of the date hereof, pursuant to which the Preferred Holder has
acknowledged and agreed, among other things, that: (i) it is aware that there
may be material information concerning the Company and/or the Preferred Stock
that has not been disclosed, but that the Preferred Holder nevertheless has
decided to continue with the Exchange; (ii) the Preferred Holder has reviewed
and sought appropriate advice, prior to executing the Letter Agreement, with
respect to an analysis of the terms of the Preferred Stock, and understands that
there are possible circumstances or transactions under or pursuant to which it
could receive more for its shares of Preferred Stock than it would under this
Agreement; (iii) it has waived any and all right to participate in any other
transaction that could yield a higher return for the Preferred Holder; and
(iv) the Preferred Holder has released the Company from and against any and all
claims relating to not having access to any undisclosed information or
benefitting from any possible higher yield with respect to the Preferred Stock.

 

AGREEMENT

 

NOW, THEREFORE, in order to implement the foregoing and in consideration of the
mutual agreements contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and the Preferred Holder agree as follows:

 

1.              Exchange; Delivery. Preferred Holder hereby assigns, sells and
transfers the Preferred Stock, plus all claims arising out of or relating to the
Preferred Stock, including but not

 

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limited to any accrued but unpaid dividends, to the Company in exchange for the
issuance by the Company, effective as of the Effective Date and in full
satisfaction of the Company’s obligations to the Preferred Holder with respect
to the Preferred Stock, of 765,198 shares of Common Stock (the “Shares”) to the
Preferred Holder.  On or within one business day after the Effective Date, the
Company shall deliver the Shares to the Preferred Holder via DWAC to an account
timely specified in writing by the Preferred Holder, and Preferred Holder shall
deliver the Preferred Stock to the Company via DTC to an account specified in
writing by the Company prior to such Exchange.

 

2.              Representations and Warranties of the Company.  The Company
hereby represents and warrants to the Preferred Holder that as of the Effective
Date:

 

2.1                               Organization.  The Company is duly
incorporated and validly existing in good standing under the laws of the State
of Delaware.

 

2.2                               Due Authorization.  The Company has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement. This Agreement has been duly authorized and
validly executed and delivered by the Company and no other corporate action on
the part of the Company, its board of directors or its stockholders is necessary
to authorize the execution and delivery by the Company of this Agreement or the
consummation of the transactions contemplated by this Agreement, including,
without limitation, the issuance and delivery of the Shares.  Furthermore, the
Company’s board of directors has authorized its officers to execute this
Agreement and the transactions contemplated hereunder.  This Agreement, assuming
due and valid authorization, execution and delivery hereof and thereof by the
Preferred Holder, constitutes a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
rights to indemnity and contribution may be limited by state or federal
securities laws, 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 (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

2.3                               Valid Issuance; Reservation of Shares;
Preemptive Rights.  The Shares are duly authorized and, when issued and
exchanged in accordance with the terms hereof, (i) will be duly and validly
issued, free and clear of any liens, claims or encumbrances (“Liens”) imposed by
or through the Company or by operation of law of which the Company has knowledge
and (ii) will be issued and delivered in compliance with all applicable Federal
and state securities laws.  Neither the cancellation of the Preferred Stock, nor
the Exchange nor the performance by the Company of its obligations under this
Agreement will trigger any preemptive, “poison-pill”, anti-takeover,
anti-dilution, reset or other similar rights.

 

2.4                               Non-Contravention.  The execution and delivery
of this Agreement, the issuance of the Shares and the consummation of the
transactions contemplated hereby and thereby will not, (a) conflict with or
constitute a material violation of or default (with the passage of time or
otherwise) under or give rise to any right of termination, material amendment,
cancellation or acceleration or loss of any material rights under: (i) any
material contracts to which the Company is a party; or (ii) the certificate of
incorporation or the bylaws of

 

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the Company or any similar organizational document of the Company; or (b):
(i) result in the creation or imposition (or the obligation to create or impose)
of any material lien, encumbrance, claim, security interest, pledge, charge or
restriction of any kind upon any of the properties or assets of the Company; or
(ii) result in an acceleration of indebtedness pursuant to any obligation,
agreement or condition contained in agreement or document to which the Company
is a party or is bound, other than with respect to the Preferred Stock; or
(c) to the Company’s knowledge, violate any order or decree applicable to the
Company, or by which it or any of its operations are bound, and no such
violation or default currently exists. No consent, approval, authorization or
other order of, or registration, qualification or filing with, any regulatory
body, administrative agency or other governmental body in the United States is
required for the execution and delivery of the Agreement and the valid issuance
of the Shares prior to the Effective Date except for any securities filings
required to be made under state securities laws or any filings required by The
Nasdaq Global Market.

 

2.5                               Exchange Act Compliance. The documents that
the Company filed under the Securities Exchange Act of 1934 (the “Exchange Act”)
since December 31, 2011 (including all exhibits included therein and documents
incorporated by reference therein hereinafter being referred to as the “Required
Documents”) complied in all material respects with the requirements of the
Exchange Act, and the rules and regulations of the Commission promulgated
thereunder as of their respective filing dates, and none of the Required
Documents, when filed, 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.

 

2.6                               Non-Public Information.  Other than
information concerning the Exchange and this Agreement, which will be disclosed
to the public pursuant to Section 5.11, the Company is not in possession of any
material non-public information as of the execution of this Agreement, and the
Company has not disclosed any material non-public information to the Preferred
Holder.

 

2.7                               Exemption from Registration. The Exchange is
exempt from the registration requirements of the Securities Act pursuant to the
provisions of Section 3(a)(9) thereof.  The Company has complied in all material
respects with such provisions and, without limiting the generality thereof, has
not paid to any person, directly or indirectly, any commission or other
remuneration for soliciting the Exchange. Neither the Company nor any of its
Affiliates, nor any person acting on its or their behalf: (i) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the Exchange; (ii) in the three months prior to
Effective Date, has, other than the transactions contemplated with respect to
the Preferred Stock and pursuant to this Agreement, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy or exchange
any security, under any circumstances that would require registration of the
Shares under the Securities Act; or (iii) has issued any shares of Common Stock
or shares of any series of preferred stock or other securities or instruments
convertible into, exchangeable for or otherwise entitling the holder thereof to
acquire shares of Common Stock which would be integrated with the Exchange or
the issuance of the Shares for purposes of the Securities Act or of any
applicable stockholder approval provisions, nor will the Company or any of its
Affiliates take any action or steps that would require registration of the
Shares under the Securities Act.

 

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2.8                               No Reliance.  In entering into this Agreement,
the Company: (i) is not relying on any advice or representation of the Preferred
Holder or any of its affiliates (other than the representations of the Preferred
Holder contained herein), other than the Letter Agreement; (ii) has not received
from the Preferred Holder or any of its affiliates any assurance or guarantee as
to the merits (whether legal, regulatory, tax, financial or otherwise) of the
Exchange or entering into this Agreement; (iii) has consulted with its own
legal, regulatory, tax, business, investment, financial and accounting advisors
to the extent that it has deemed necessary; and (iv) has entered into this
Agreement based on its own independent judgment and on the advice of its
advisors as it has deemed necessary, and not on any view (whether written or
oral) expressed by the Preferred Holder or any of its affiliates.  Neither the
Preferred Holder nor any of its affiliates is now or has ever been a financial
advisor, or other fiduciary, with respect to the Company.

 

3.              Representations, Warranties and Covenants of the Preferred
Holder. The Preferred Holder hereby represents and warrants to the Company and
agrees as follows:

 

3.1                               Due Authorization.  The Preferred Holder has
all requisite corporate or other entity power and authority to execute, deliver
and perform its obligations under this Agreement and the Letter Agreement, and
this Agreement and the Letter Agreement have been duly authorized and validly
executed and delivered by the Preferred Holder and no other corporate or other
action on the part of the Preferred Holder is necessary to authorize the
execution and delivery by the Preferred Holder of this Agreement or the Letter
Agreement.  This Agreement and the Letter Agreement constitute the legal, valid
and binding agreements of the Preferred Holder, enforceable against the
Preferred Holder in accordance with their respective 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 (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

3.2                               No Legal, Tax or Investment Advice.  The
Preferred Holder understands that nothing in this Agreement or any other
materials presented to the Preferred Holder by or on behalf of the Company in
connection with the Exchange constitutes legal, tax or investment advice and
represents and warrants to the Company that it has consulted such legal,
regulatory, accounting, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with the Exchange
or determining the merits thereof.

 

3.3                               Affiliate Status; 20% Holder Status.

 

(a)                                 As of Effective Date, the Preferred Holder
represents and warrants that the Preferred Holder is not an Affiliate of the
Company, and has not been an Affiliate of the Company for the three months
preceding the Effective Date.

 

(b)                                 The Preferred Holder further represents and
warrants that, immediately after the consummation of the transactions
contemplated herein, the Preferred Holder will not beneficially own: (i) any
shares of Preferred Stock; and (ii) no more than 19.99% of the Company’s issued
and outstanding Common Stock, based on the total shares of Common Stock
outstanding as set forth in the Company’s Quarterly Report on Form 10-Q for the
period

 

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ended September 30, 2012.  Additionally, as of the date hereof, the Preferred
Holder represents and warrants that it does not beneficially own any shares of
the Company’s Common Stock and that, after giving effect to the transactions
contemplated hereby, it will beneficially own an aggregate of 765,198 shares of
Common Stock.

 

3.4                               Ownership.  The Preferred Holder is the sole
beneficial owner of the Preferred Stock, free and clear of all Liens, and upon
execution of this Agreement, the Company will take title to the Preferred Stock,
free and clear of all Liens. There are no actions, suits or proceedings against
the Preferred Holder affecting the title of any of the Preferred Stock or the
right of the Preferred Holder to execute, deliver and perform this Agreement.

 

4.              Amendment and Waiver.  No provision of this Agreement may be
amended or modified except upon the written consent of the Company and the
Preferred Holder, and no provision hereof may be waived other than by a written
instrument signed by the party against whom enforcement of any such waiver is
sought.

 

5.              Miscellaneous.

 

5.1                               Intentionally Omitted.

 

5.2                               Headings; Construction.  The headings of the
various sections of this Agreement have been inserted for convenience of
reference only and shall not be deemed to be part of this Agreement. The
language used in this Agreement is and will be 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.

 

5.3                               Pronouns.  All pronouns contained herein, and
any variations thereof, shall be deemed to refer to the masculine, feminine or
neutral, singular or plural, as to the identity of the parties hereto may
require.

 

5.4                               Severability.  In case any provision contained
in this Agreement should be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

 

5.5                               Governing Law.  This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New York, without giving effect to the principles of conflicts of law. The
parties agree that any action brought by either party under or in relation to
this Agreement, including without limitation to interpret or enforce any
provision of this Agreement, shall be brought in, and each party agrees to and
does hereby submit to the jurisdiction and venue of, any state or federal court
located in New York.

 

5.6                               Entire Agreement.  This Agreement and the
Letter Agreement constitute the full and entire understanding and agreement
between the parties with regard to the subject matter hereof, and no party shall
be liable or bound to any other in any manner by any oral or written
representations, warranties, covenants and agreements except as specifically set
forth herein.  Each party expressly represents and warrants that it is not
relying on any oral or written representations, warranties, covenants or
agreements outside of this Agreement.

 

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5.7                               Counterparts.  This Agreement may be executed
in two (2) or more counterparts, each of which shall constitute an original, but
all of which, when taken together, shall constitute but one (1) instrument, and
shall become effective when one (1) or more counterparts have been signed by
each party hereto and delivered to the other parties.

 

5.8                               Successors and Assigns.  This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and assigns.

 

5.9                               No Third Party Beneficiaries.  This Agreement
is intended for the benefit of the parties hereto and their respective permitted
successors and assignees, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.

 

5.10                        Further Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as any other 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.

 

5.11                        Form 8-K.  The Company agrees that it will, on or
before 9:30 a.m., Eastern Time, on the business day immediately following the
date on which this Agreement is executed and delivered by the Company and the
Preferred Holder, file with the Commission a Current Report on Form 8-K
disclosing the material terms of this Agreement and the transactions
contemplated hereby, including the issuance of the Shares; provided, however,
that the Company will not disclose the identity of the Preferred Holder without
the Preferred Holder’s written consent, and the Preferred Holder shall have a
reasonable opportunity to review and comment on any such Form 8-K prior to the
filing thereof.

 

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IN WITNESS WHEREOF, the parties hereto have executed this SECURITIES EXCHANGE
AGREEMENT as of the date set forth in the first paragraph hereof.

 

COMPANY:

 

PREFERRED HOLDER:

 

 

 

CYCLACEL PHARMACEUTICALS, INC.

 

TANG CAPITAL PARTNERS, LP

 

 

 

By:

/s/ Spiro Rombotis

 

By:

/s/ Kevin Tang

 

 

 

 

 

Name:

Spiro Rombotis

 

Name:

Kevin Tang

 

 

 

 

 

Title:

President and CEO

 

Title:

Managing Director

 

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