Exhibit 10.1
 
SECURITIES PURCHASE AGREEMENT
 
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.
 

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“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 Arnold & Porter LLP, 555 Twelfth Street,
N.W., Washington, D.C. 20005 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.

ENTREMED, INC.
 
 
By:_____________________________
 
      Name:  Michael M. Tarnow
 
      Title:    Executive Chairman
     
Address for notice:
     
9640 Medical Center Drive
 
Rockville, Maryland 20850
 
Attention:   General Counsel & Secretary
 
Facsimile:  240.864.2601
     
With a copy to (which shall not constitute notice):
 
 
Richard E. Baltz
Arnold & Porter LLP
555 12th St., N.W.
Washington, D.C.  20004
Facsimile:  202.942.5999
 

[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.
 
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