Exhibit 4.2**NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUBJECT TO SECTION 6 BELOW, NO SALE OR DISPOSITIONMAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER SAID ACT OR WITHOUT AN EFFECTIVEREGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR HOLDER, SATISFACTORY TOCOMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT OR RECEIPT OF A NO-ACTION LETTER FROMTHE SECURITIES AND EXCHANGE COMMISSION.****WARRANT TO PURCHASE 62,500 SHARES OF COMMON STOCK****September 12, 2007****THIS CERTIFIES THAT**, for value received, **Merrill Lynch Capital**(“Holder”) is entitled to subscribefor and purchase Sixty-Two Thousand Five Hundred (62,500) shares of fully paid and nonassessableCommon Stock of **EntreMed, Inc.**, a Delaware corporation (“Company”), at the Warrant Price (ashereinafter defined), subject to the provisions and upon the terms and conditions hereinafter setforth. As used herein, the term “Common Stock” shall mean Company’s presently authorized commonstock, $0.01 par value per share, and any stock into which such common stock may hereafter beconverted or exchanged and the term “Warrant Shares” shall mean the shares of Common Stock whichHolder may acquire pursuant to this Warrant and any other shares of stock into which such shares ofCommon Stock may hereafter be converted or exchanged.1. Warrant Price. The “Warrant Price” shall initially be Two and 00/100 dollars ($2.00)per share, subject to adjustment as provided in Section 7 below.2. Conditions to Exercise. The purchase right represented by this Warrant may be exercisedat any time, or from time to time, in whole or in part during the term commencing on the datehereof and ending at 5:00 P.M. Pacific time on the fifth anniversary of the date of this Warrant(the “Expiration Date”).3. Method of Exercise or Conversion; Payment; Issuance of Shares; Issuance of New Warrant.
 

 
(a) Cash Exercise. Subject to Section 2 hereof, the purchase right represented bythis Warrant may be exercised by Holder hereof, in whole or in part, by the surrender of theoriginal of this Warrant (together with a duly executed Notice of Exercise in substantiallythe form attached hereto) at the principal office of Company (as set forth in Section 19below) and by payment to Company, by certified or bank check, or wire transfer ofimmediately available funds, of an amount equal to the then applicable Warrant Price pershare multiplied by the number of Warrant Shares then being purchased. In the event of anyexercise of the rights represented by this Warrant, certificates for the shares of stock sopurchased shall be in the name of, and delivered to, Holder hereof, or as such Holder maydirect (subject to the terms of transfer contained herein and upon payment by such Holderhereof of any applicable transfer taxes). Such delivery shall be made within 30 days afterexercise of this Warrant and at Company’s expense and, unless this Warrant has been fullyexercised or expired, a new Warrant having terms and conditions substantially identical tothis Warrant and representing the portion of the Warrant Shares, if any, with respect towhich this Warrant shall not have been exercised, shall also be issued to Holder hereofwithin 30 days after exercise of this Warrant.(b) Conversion. In lieu of exercising this Warrant as specified in Section 3(a),Holder may from time to time convert this Warrant, in whole or in part, into Warrant Sharesby surrender of the original of this Warrant (together with a duly executed Notice ofExercise in substantially the form attached hereto) at the principal office of Company, inwhich event Company shall issue to Holder the number of Warrant Shares computed using thefollowing formula:         X      = Y (A-B)      A           Where:         X = the number of Warrant Shares to be issued to Holder.         Y = the number of Warrant Shares purchasable under this Warrant (at the date of suchcalculation).         A = the Fair Market Value of one share of Company’s Common Stock (at the date ofsuch calculation).         B = Warrant Price (as adjusted to the date of such calculation).(c) Fair Market Value. For purposes of this Section 3, Fair Market Value of oneshare of Company’s Common Stock shall mean:(i) The average of the closing bid and asked prices of Common Stock quoted in theOver-The-Counter Market Summary, the last reported sale price quoted on the NasdaqStock Market or on any other exchange on which the Common Stock is listed, whicheveris applicable, as published in the Western Edition of the Wall StreetJournal for the three (3) trading days prior to the date of determination ofFair Market Value; or
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(ii) In the event of an exercise in connection with a merger, acquisition or otherconsolidation in which Company is not the surviving entity, the per share FairMarket Value for the Common Stock shall be the value to be received per share ofCommon Stock by all holders of the Common Stock in such transaction as determined bythe Board of Directors; or(iii) In any other instance, the per share Fair Market Value for the Common Stockshall be as determined in the reasonable good faith judgment of Company’s Board ofDirectors.In the event of 3(c)(ii) or 3(c)(iii), above, the Company shall prepare a certificate, to besigned by an authorized officer of Company, setting forth in reasonable detail the basis forand method of determination of the per share Fair Market Value of the Common Stock. TheBoard of Directors will also certify to Holder that this per share Fair Market Value will beapplicable to all holders of Company’s Common Stock.(d) Automatic Exercise. To the extent this Warrant is not previously exercised, itshall be deemed to have been automatically converted in accordance with Sections 3(b)and 3(c) hereof (even if not surrendered) as of immediately before its expiration,involuntary termination or cancellation if the then-Fair Market Value of a Warrant Shareexceeds the then-Warrant Price, unless Holder notifies Company in writing to the contraryprior to such automatic exercise.4. Representations and Warranties of Holder and Company.(a) Representations and Warranties by Holder. Holder represents and warrants toCompany with respect to this purchase as follows:(i) Evaluation. Holder has substantial experience in evaluating andinvesting in private placement transactions of securities of companies similar toCompany so that Holder is capable of evaluating the merits and risks of itsinvestment in Company and has the capacity to protect its interests.(ii) Resale. Except for transfers to an affiliate of Holder, Holder isacquiring this Warrant and the Warrant Shares issuable upon exercise of this Warrant(collectively the “Securities”) for investment for its own account and not with aview to, or for resale in connection with, any distribution thereof. Holderunderstands that the Securities have not been registered under the Securities Act of1933, as amended (the “Act”) by reason of a specific exemption from the registrationprovisions of the Act which depends upon, among other things, the bona fide natureof the investment intent as expressed herein.(iii) Rule 144. Holder acknowledges that the Securities must be heldindefinitely unless subsequently registered under the Act or an exemption from suchregistration is available. Holder is aware of the provisions of Rule 144promulgated under the Act.(iv) Accredited Investor. Holder is an “accredited investor” within themeaning of Regulation D promulgated under the Act.
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(v) Opportunity To Discuss. Holder has had an opportunity to discussCompany’s business, management and financial affairs with its management and anopportunity to review Company’s facilities. Holder understands that suchdiscussions, as well as the written information issued by Company, were intended todescribe the aspects of Company’s business and prospects which Company believes tobe material but were not necessarily a thorough or exhaustive description.(b) Representations and Warranties by Company. Company hereby represents andwarrants to Holder that the statements in the following paragraphs of this Section 4(b) aretrue and correct (a) as of the date hereof and (b) except where any such representation andwarranty relates specifically to an earlier date, as of the date of any exercise of thisWarrant.(i) Corporate Organization and Authority. Company (a) is a corporation dulyorganized, validly existing, and in good standing in its jurisdiction ofincorporation, (b) has the corporate power and authority to own and operate itsproperties and to carry on its business as now conducted and as proposed to beconducted; and (c) is qualified as a foreign corporation in all jurisdictions wheresuch qualification is required.(ii) Corporate Power. Company has all requisite legal and corporate powerand authority to execute, issue and deliver this Warrant, to issue the WarrantShares issuable upon exercise or conversion of this Warrant, and to carry out andperform its obligations under this Warrant and any related agreements.(iii) Authorization; Enforceability. All corporate action on the part ofCompany, its officers, directors and shareholders necessary for the authorization,execution, delivery and performance of its obligations under this Warrant and forthe authorization, issuance and delivery of this Warrant and the Warrant Sharesissuable upon exercise of this Warrant has been taken and this Warrant constitutesthe legally binding and valid obligation of Company enforceable in accordance withits terms.(iv) Valid Issuance of Warrant and Warrant Shares. This Warrant has beenvalidly issued and is free of restrictions on transfer other than restrictions ontransfer set forth herein and under applicable state and federal securities laws.The Warrant Shares issuable upon conversion of this Warrant, when issued, sold anddelivered in accordance with the terms of this Warrant for the considerationexpressed herein, will be duly and validly issued, fully paid and nonassessable, andwill be free of restrictions on transfer other than restrictions on transfer underthis Warrant and under applicable state and federal securities laws. Subject toapplicable restrictions on transfer, the issuance and delivery of this Warrant andthe Warrant Shares issuable upon exercise or conversion of this Warrant are notsubject to any preemptive or other similar rights or any liens or encumbrancesexcept as specifically set forth in Company’s Certificate of Incorporation or thisWarrant. The offer, sale and issuance of the Warrant Shares, as contemplated bythis Warrant, are exempt from the prospectus and registration requirements ofapplicable United States federal and state security laws, and neither Company norany authorized agent acting on its behalf has or will take any action hereafter thatwould cause the loss of such exemption.
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(v) No Conflict. The execution, delivery, and performance of this Warrantwill not result in (a) any violation of, be in conflict with, or constitute adefault under, with or without the passage of time or the giving of notice (1) anyprovision of Company’s Certificate of Incorporation or by-laws; (2) any provision ofany judgment, decree, or order to which Company is a party, by which it is bound, orto which any of its material assets are subject; (3) any contract, obligation, orcommitment to which Company is a party or by which it is bound; or (4) any statute,rule, or governmental regulation applicable to Company, or (b) the creation of anylien, charge or encumbrance upon any assets of Company.(vi) Capitalization. Company has reserved a sufficient number of shares ofCommon Stock to permit the full exercise of this Warrant.5. Legends.(a) Legend. Each certificate representing the Warrant Shares shall be endorsed withsubstantially the following legend:THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAYNOT BE TRANSFERRED (UNLESS SUCH TRANSFER IS TO AN AFFILIATE OF HOLDER WITHOUTPAYMENT OR PROMISE OF CONSIDERATION, OR IF SUCH AFFILIATE IS AN “ACCREDITEDINVESTOR” AS DEFINED IN REGULATION D OF SAID ACT) UNLESS COVERED BY AN EFFECTIVEREGISTRATION STATEMENT UNDER SAID ACT, A “NO ACTION” LETTER FROM THE SECURITIES ANDEXCHANGE COMMISSION WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THEREQUIREMENTS OF RULE 144 OF THE SECURITIES AND EXCHANGE COMMISSION, OR (IFREASONABLY REQUIRED BY COMPANY) AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TOTHE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.Company need not enter into its stock records a transfer of Warrant Shares unless theconditions specified in the foregoing legend are satisfied. Company may also instruct itstransfer agent not to allow the transfer of any of the Warrant Shares unless the conditionsspecified in the foregoing legend are satisfied.(b) Removal of Legend and Transfer Restrictions. The legend relating to the Actendorsed on a certificate pursuant to paragraph 5(a) of this Warrant shall be removed andCompany shall issue a certificate without such legend to Holder if (i) the Securities areregistered under the Act and a prospectus meeting the requirements of Section 10 of the Actis available or (ii) Holder provides to Company an opinion of counsel for Holder reasonablysatisfactory to Company, a no-action letter or interpretive opinion of the staff of theSecurities and Exchange Commission (“SEC”) reasonably satisfactory to Company, or otherevidence reasonably satisfactory to Company, to the effect that public sale, transfer orassignment of the Securities may be made without registration and without compliance withany restriction such as Rule 144.
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6. Condition of Transfer or Exercise of Warrant. It shall be a condition to any transferor exercise of this Warrant that at the time of such transfer or exercise, Holder shall provideCompany with a representation in writing that Holder or transferee is acquiring this Warrant andthe shares of Common Stock to be issued upon exercise for investment purposes only and not with aview to any sale or distribution, or will provide Company with a statement of pertinent factscovering any proposed distribution. As a further condition to any transfer of this Warrant or anyor all of the shares of Common Stock issuable upon exercise of this Warrant, other than a transferregistered under the Act, Company may request a legal opinion, in form and substance satisfactoryto Company and its counsel, reciting the pertinent circumstances surrounding the proposed transferand stating that such transfer is exempt from the registration and prospectus delivery requirementsof the Act. Company shall not require Holder to provide an opinion of counsel if the transfer isto an affiliate of Holder, without payment or promise of consideration, or if such affiliatetransferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Asfurther condition to each transfer, at the request of Company, Holder shall surrender this Warrantto Company and the transferee shall receive and accept a Warrant, of like tenor and date, executedby Company.7. Adjustment for Certain Events. The number and kind of securities purchasable upon theexercise of this Warrant and the Warrant Price shall be subject to adjustment from time to timeupon the occurrence of certain events, as follows:(a) Reclassification or Merger. In case of (i) any reclassification or change ofsecurities of the class issuable upon exercise of this Warrant (other than a change in parvalue, or from par value to no par value, or from no par value to par value, or as a resultof a subdivision or combination), (ii) any merger of Company with or into anothercorporation (other than a merger with another corporation in which Company is the acquiringand the surviving corporation and which does not result in any reclassification or change ofoutstanding securities issuable upon exercise of this Warrant), or (iii) any sale of all orsubstantially all of the assets of Company, Company, or such successor or purchasingcorporation, as the case may be, shall duly execute and deliver to Holder anew Warrant (in form and substance satisfactory to Holder of this Warrant), or Company shallmake appropriate provision without the issuance of a new Warrant, so that Holder shall havethe right to receive, at a total purchase price not to exceed that payable upon the exerciseof the unexercised portion of this Warrant, and in lieu of the Warrant Shares theretoforeissuable upon exercise or conversion of this Warrant, the kind and amount of shares ofstock, other securities, money and property receivable upon such reclassification, change,merger or sale by a holder of the number of shares of Common Stock then purchasable underthis Warrant, or in the case of such a merger or sale in which the consideration paidconsists all or in part of assets other than securities of the successor or purchasingcorporation, at the option of Holder, the securities of the successor or purchasingcorporation having a value at the time of the transaction equivalent to the value of theWarrant Shares purchasable upon exercise of this Warrant at the time of the transaction.Any new Warrant shall provide for adjustments that shall be as nearly equivalent as may bepracticable to the adjustments provided for in this Section 7. The provisions of thissubparagraph (a) shall similarly apply to successive reclassifications, changes, mergers andtransfers.
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(b) Subdivision or Combination of Shares. If Company at any time while this Warrantremains outstanding and unexpired shall subdivide or combine its outstanding shares ofCommon Stock, the Warrant Price shall be proportionately decreased and the number of WarrantShares issuable hereunder shall be proportionately increased in the case of a subdivisionand the Warrant Price shall be proportionately increased and the number of Warrant Sharesissuable hereunder shall be proportionately decreased in the case of a combination.(c) Stock Dividends and Other Distributions. If Company at any time while thisWarrant is outstanding and unexpired shall (i) pay a dividend with respect to Common Stockpayable in Common Stock, then the Warrant Price shall be adjusted, from and after the dateof determination of shareholders entitled to receive such dividend or distribution, to thatprice determined by multiplying the Warrant Price in effect immediately prior to such dateof determination by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and(B) the denominator of which shall be the total number of shares of Common Stock outstandingimmediately after such dividend or distribution; or (ii) make any other distribution withrespect to Common Stock (except any distribution specifically provided for in Sections 7(a)and 7(b)), then, in each such case, provision shall be made by Company such that Holdershall receive upon exercise of this Warrant a proportionate share of any such dividend ordistribution as though it were Holder of the Warrant Shares as of the record date fixed forthe determination of the shareholders of Company entitled to receive such dividend ordistribution.(d) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, thenumber of Warrant Shares purchasable hereunder shall be adjusted, to the nearest wholeshare, to the product obtained by multiplying the number of Warrant Shares purchasableimmediately prior to such adjustment in the Warrant Price by a fraction, the numerator ofwhich shall be the Warrant Price immediately prior to such adjustment andthe denominator of which shall be the Warrant Price immediately thereafter.
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8. Notice of Adjustments. Whenever any Warrant Price or the kind or number of securitiesissuable under this Warrant shall be adjusted pursuant to Section 7 hereof, Company shall preparea certificate signed by an officer of Company setting forth, in reasonable detail, the eventrequiring the adjustment, the amount of the adjustment, the method by which such adjustment wascalculated, and the Warrant Price and number or kind of shares issuable upon exercise of thisWarrant after giving effect to such adjustment, and shall cause copies of such certificate to bemailed (by certified or registered mail, return receipt required, postage prepaid) withinthirty (30) days of such adjustment to Holder as set forth in Section 19 hereof.9. Reserved.10. Transferability of Warrant. This Warrant is transferable on the books of Company atits principal office by the registered Holder hereof upon surrender of this Warrant properlyendorsed, subject to compliance with Section 6 and applicable federal and state securities laws.Company shall issue and deliver to the transferee a new Warrant representing the Warrant sotransferred. Upon any partial transfer, Company will issue and deliver to Holder a new Warrantwith respect to the Warrant not so transferred. Holder shall not have any right to transfer anyportion of this Warrant to any direct competitor of Company.11. Reserved.12. No Fractional Shares. No fractional share of Common Stock will be issued in connectionwith any exercise or conversion hereunder, but in lieu of such fractional share Company shall makea cash payment therefor upon the basis of the Warrant Price then in effect.13. Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock uponthe exercise or conversion of this Warrant shall be made without charge to Holder for any UnitedStates or state of the United States documentary stamp tax or other incidental expense withrespect to the issuance of such certificate, all of which taxes and expenses shall be paid byCompany, and such certificates shall be issued in the name of Holder.14. No Shareholder Rights Until Exercise. Except as expressly provided herein, thisWarrant does not entitle Holder to any voting rights or other rights as a shareholder of Companyprior to the exercise hereof.15. Registry of Warrant. Company shall maintain a registry showing the name and addressof the registered Holder of this Warrant. This Warrant may be surrendered for exchange orexercise, in accordance with its terms, at such office or agency of Company, and Company andHolder shall be entitled to rely in all respects, prior to written notice to the contrary, uponsuch registry.16. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by Company ofevidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of thisWarrant, and, in the case of loss, theft, or destruction, of indemnity reasonably satisfactory toit, and, if mutilated, upon surrender and cancellation of this Warrant, Company will execute anddeliver a new Warrant, having terms and conditions substantially identical to this Warrant, inlieu hereof.
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17. Miscellaneous.(a) Issue Date. The provisions of this Warrant shall be construed and shall begiven effect in all respect as if it had been issued and delivered by Company on the datehereof.(b) Successors. This Warrant shall be binding upon any successors or assigns ofCompany.(c) Headings. The headings used in this Warrant are used for convenience only andare not to be considered in construing or interpreting this Warrant.(d) Saturdays, Sundays, Holidays. If the last or appointed day for the taking ofany action or the expiration of any right required or granted herein shall be a Saturday ora Sunday or shall be a legal holiday in the State of Connecticut, then such action may betaken or such right may be exercised on the next succeeding day not a legal holiday.(e) Attorney’s Fees. In the event of any dispute between the parties concerningthe terms and provisions of this Warrant, the party prevailing in such dispute shall beentitled to collect from the other party all costs incurred in such dispute, includingreasonable attorney’s fees.18. No Impairment. Company will not, by amendment of its Certificate of Incorporation orany other voluntary action, avoid or seek to avoid the observance or performance of any of theterms of this Warrant, but will at all times in good faith assist in the carrying out of all suchterms and in the taking of all such action as may be necessary or appropriate in order to protectthe rights of Holder hereof against impairment.19. Addresses. Any notice required or permitted hereunder shall be in writing and shallbe mailed by overnight courier, registered or certified mail, return receipt requested, andpostage prepaid, or otherwise delivered by hand or by messenger, addressed as set forth below, orat such other address as Company or Holder hereof shall have furnished to the other party inaccordance with the delivery instructions set forth in this Section 19.       If to Company: EntreMed, Inc.    9640 Medical Center Drive    Rockville, MD 20850    Attn: Cynthia Wong Hu       If to Holder: Merrill Lynch Capital    222 N. LaSalle Street, 16th Floor