Document:

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Exhibit 4.1

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

ENTREMED, INC.

WARRANT TO PURCHASE COMMON STOCK

February ___, 2006

Void After February
            
, 20                    

     THIS CERTIFIES THAT, for value received, [ ], or permitted registered assigns (the
“Holder”), is entitled to subscribe for and purchase at the Exercise Price (defined below) from
EntreMed, Inc., a Delaware corporation (the “Company”) up to [ ] shares of the common stock
of the Company, par value $0.01 per share (the “Common Stock”).

     1. DEFINITIONS. As used herein, the following terms shall have the following respective
meanings:

          (a) “Exercise Period” shall mean the period commencing with the date that is 180 days after
the date hereof and ending five years from the date hereof, unless sooner terminated as provided
below.

          (b) “Exercise Price” shall mean $2.50 per share, subject to adjustment pursuant to Section 5
below.

          (c) “Exercise Shares” shall mean the shares of Common Stock issuable upon exercise of this
Warrant.

          (d) “Trading Day” shall mean (a) any day on which the Common Stock is listed or quoted and
traded on its primary Trading Market, (b) if the Common Stock is not then listed or quoted and
traded on any Eligible Market, then a day on which trading occurs on the OTC Bulletin Board (or any
successor thereto), or (c) if trading does not occur on the OTC Bulletin Board (or any successor
thereto), any Business Day.

     2. EXERCISE OF WARRANT. The rights represented by this Warrant may be exercised in whole or
in part at any time during the Exercise Period, by delivery

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of the following to the Company at its address set forth on the signature page hereto (or at
such other address as it may designate by notice in writing to the Holder):

          (a) An executed Notice of Exercise in the form attached hereto;

          (b) Payment of the Exercise Price either (i) in cash or by check, (ii) by cancellation of
indebtedness, or (iii) pursuant to Section 2.1 below; and

          (c) This Warrant.

          The Holder shall not be required to deliver the original Warrant in order to effect the
exercise hereunder. Execution and delivery of the Notice of Exercise shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase
the remaining number of Exercise Shares.

     Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with the Depository
Trust Company through its Deposit Withdrawal Agent Commission system if the Company is a
participant in such system (and so long as the legend may be removed in accordance with Section 4.1
of the Securities Purchase Agreement dated February 2, 2006, by and among the Company and the
purchasers indicated on the signature pages thereto (the “Purchase Agreement”)), and otherwise by
physical delivery to the address specified by the Holder in the Notice of Exercise within three
business days from the delivery to the Company of the Notice of Exercise, surrender of this Warrant
and payment of the aggregate Exercise Price as set forth above. This Warrant shall be deemed to
have been exercised on the date the Exercise Price is received by the Company. The Exercise Shares
shall be deemed to have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of
the date the Warrant has been exercised by payment to the Company of the Exercise Price.

     In addition to any other rights available to the Holder, if the Company fails to deliver to
the Holder a certificate representing Exercise Shares by the third Trading Day after the date on
which delivery of such certificate is required by this Warrant, and if after such third Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving
from the Company (a “Buy-In”), then in the Holder’s sole discretion, the Company shall within three
Trading Days after the Holder’s request, either (i) pay cash to the Holder in an amount equal to
the Holder’s total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased less the Exercise Price (the “Buy-In Price”), at which point the
Company’s obligation to deliver such certificate (and to issue such Common Stock) shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the
Closing Price on the date of the event giving rise to the Company’s obligation to deliver such
certificate.

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     The person in whose name any certificate or certificates for Exercise Shares are to be issued
upon exercise of this Warrant shall be deemed to have become the holder of record of such shares on
the date on which this Warrant was surrendered and payment of the Exercise Price was made,
irrespective of the date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the Company are closed,
such person shall be deemed to have become the holder of such shares at the close of business on
the next succeeding date on which the stock transfer books are open.

     To the extent permitted by law, the Company’s obligations to issue and deliver Exercise Shares
in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any person or entity or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other person or entity of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other person or entity, and irrespective
of any other circumstance which might otherwise limit such obligation of the Company to the Holder
in connection with the issuance of Exercise Shares. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon exercise of the
Warrant as required pursuant to the terms hereof.

     2.1. Net Exercise. If during the Exercise Period, the Holder is not permitted to sell
Exercise Shares pursuant to the Registration Statement, as defined in the Purchase Agreement, and
the fair market value of one share of the Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash or
by check, or by cancellation of indebtedness, the Holder may elect to receive shares equal to the
value (as determined below) of this Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with the properly endorsed Notice of
Exercise in which event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

X = Y (A-B)

A

Where X = the number of shares of Common Stock to be issued to the Holder

			
	Y =	 	the number of shares of Common Stock purchasable under the Warrant or,
if only a portion of the Warrant is being exercised, the portion of
the Warrant being canceled (at the date of such calculation)

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	A =	 	the fair market value of one share of the Company’s Common Stock (at
the date of such calculation)

			
	B =	 	Exercise Price (as adjusted to the date of such calculation)

     For purposes of the above calculation, the “fair market value” of one share of Common Stock
shall mean (i) the average of the closing sales prices for the shares of Common Stock on the Nasdaq
National Market or other trading market where such security is listed or traded as reported by
Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by
the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then
reporting sales prices of such security) (collectively, “Bloomberg”) for the 10 consecutive trading
days immediately preceding such date, or (ii) if the Nasdaq National Market is not the principal
trading market for the shares of Common Stock, the average of the reported sales prices reported by
Bloomberg on the principal trading market for the Common Stock during the same period, or, if there
is no sales price for such period, the last sales price reported by Bloomberg for such period, or
(iii) if neither of the foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security as reported by
Bloomberg, or if no sales price is so reported for such security, the last bid price of such
security as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date
on any of the foregoing bases, the fair market value shall be as determined by the Board of
Directors of the Company in the exercise of its good faith judgment.

     2.2. Issuance of New Warrants. Upon any partial exercise of this Warrant, the Company, at its
expense, will forthwith and, in any event within five business days, issue and deliver to the
Holder a new warrant or warrants of like tenor, registered in the name of the Holder, exercisable,
in the aggregate, for the balance of the number of shares of Common Stock remaining available for
purchase under the Warrant.

     2.3. Payment of Taxes and Expenses. The Company shall pay any recording, filing, stamp or
similar tax which may be payable in respect of any transfer involved in the issuance of, and the
preparation and delivery of certificates (if applicable) representing, (i) any Exercise Shares
purchased upon exercise of this Warrant and/or (ii) new or replacement warrants in the Holder’s
name or the name of any transferee of all or any portion of this Warrant.

     2.4. Exercise Limitations; Holder’s Restrictions. A Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after
giving effect to such issuance after exercise, such Holder (together with such Holder’s
affiliates), as set forth on the applicable Notice of Exercise, would beneficially own in excess of
4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to
such issuance. For purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by such Holder and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock which would be

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issuable upon (A) exercise of the remaining, nonexercised portion of this Warrant beneficially
owned by such Holder or any of its affiliates and (B) exercise or conversion of the unexercised or
nonconverted portion of any other securities of the Company (including, without limitation, any
other shares of Common Stock or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2.4,
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act, it
being acknowledged by a Holder that the Company is not representing to such Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and such Holder is solely
responsible for any schedules required to be filed in accordance therewith. To the extent that
the limitation contained in this Section 2.4 applies, the determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder) and of which a portion of this
Warrant is exercisable shall be in the sole discretion of a Holder, and the submission of a Notice
of Exercise shall be deemed to be each Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by such Holder) and of which portion of this
Warrant is exercisable, in each case subject to such aggregate percentage limitation, and the
Company shall have no obligation to verify or confirm the accuracy of such determination. For
purposes of this Section 2.4, in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more recent public
announcement by the Company or (z) any other notice by the Company or the Company’s Transfer Agent
setting forth the number of shares of Common Stock outstanding. Upon the written or oral request
of a Holder, the Company shall within two Trading Days confirm orally and in writing to such Holder
the number of shares of Common Stock then outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by such Holder or its affiliates since the date
as of which such number of outstanding shares of Common Stock was reported. The provisions of this
Section 2.4 may be waived by such Holder, at the election of such Holder, upon not less than 61
days’ prior notice to the Company, and the provisions of this Section 2.4 shall continue to apply
until such 61st day (or such later date, as determined by such Holder, as may be specified in such
notice of waiver).

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     3. COVENANTS OF THE COMPANY.

     3.1. Covenants as to Exercise Shares. The Company covenants and agrees that all Exercise
Shares that may be issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and free from all taxes,
liens and charges with respect to the issuance thereof. The Company further covenants and agrees
that the Company will at all times during the Exercise Period, have authorized and reserved, free
from preemptive rights, a sufficient number of shares of Common Stock to provide for the exercise
of the rights represented by this Warrant. If at any time during the Exercise Period the number of
authorized but unissued shares of Common Stock shall not be sufficient to permit exercise of this
Warrant, the Company will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such number of shares
as shall be sufficient for such purposes.

     3.2. No Impairment. Except and to the extent as waived or consented to by the Holder, the
Company will not, by amendment of its Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all such action as may be
necessary or appropriate in order to protect the exercise rights of the Holder against impairment.

     3.3. Notices of Record Date and Certain Other Events. In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend (other than a cash dividend which is the
same as cash dividends paid in previous quarters) or other distribution, the Company shall mail to
the Holder, at least 20 days prior to the date on which any such record is to be taken for the
purpose of such dividend or distribution, a notice specifying such date. In the event of any
voluntary dissolution, liquidation or winding up of the Company, the Company shall mail to the
Holder, at least 20 days prior to the date of the occurrence of any such event, a notice specifying
such date. In the event the Company authorizes or approves, enters into any agreement
contemplating, or solicits stockholder approval for any Fundamental Transaction, as defined in
Section 7 herein, the Company shall mail to the Holder, at least twenty days prior to the date of
the occurrence of such event, a notice specifying such date.

     4. REPRESENTATIONS OF HOLDER.

     4.1. Acquisition of Warrant for Personal Account. The Holder represents and warrants that it
is acquiring the Warrant solely for its account and not with a view to or for sale or distribution
of said Warrant or any part thereof. The Holder also represents that the entire legal and
beneficial interests of the Warrant and Exercise Shares the Holder is acquiring is being acquired
for, and will be held for, its account only.

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     4.2. Securities Are Not Registered.

          (a) The Holder understands that the Warrant and the Exercise Shares have not been registered
under the Securities Act of 1933, as amended (the “Act”) on the basis that no distribution or
public offering of the stock of the Company is to be effected. The Holder realizes that the basis
for the exemption may not be present if, notwithstanding its representations, the Holder has a
present intention of acquiring the securities for a fixed or determinable period in the future,
selling (in connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the securities. The Holder has no such present intention except as set
forth in Article 6 of the Purchase Agreement.

          (b) The Holder recognizes that the Warrant and the Exercise Shares must be held indefinitely
unless they are subsequently registered under the Act or an exemption from such registration is
available. The Holder recognizes that the Company will register the Exercise Shares pursuant to
the provisions of Article 6 of the Purchase Agreement.

          (c) The Holder is aware that neither the Warrant nor the Exercise Shares may be sold pursuant
to Rule 144 adopted under the Act unless certain conditions are met, including, among other things,
the existence of a public market for the shares, the availability of certain current public
information about the Company, the resale following the required holding period under Rule 144 and
the number of shares being sold during any three-month period not exceeding specified limitations.

     4.3. Disposition of Warrant and Exercise Shares.

          (a) The Holder further agrees not to make any disposition of all or any part of the Warrant or
Exercise Shares in any event unless and until:

               (i) There is then in effect a registration statement under the Act covering such proposed
disposition and such disposition is made in accordance with said registration statement; or

               (ii) The Holder shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, for the Holder to the effect that such disposition will not require
registration of such Warrant or Exercise Shares under the Act or any applicable state securities
laws; provided, however, that no such opinion of counsel shall be required for sales or transfers
(a) under Rule 144, (b) to one of its nominees, affiliates or a nominee thereof, (c) to a pension
or profit-sharing fund established and maintained for its employees or for the employees of any
affiliate, (d) from a nominee to any of the aforementioned persons as beneficial owner of this
Warrant or such Exercise Shares or (e) to a qualified institutional buyer, so long as such transfer
is effected in compliance with Rule 144A under the Securities Act.

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          (b) The Holder understands and agrees that, subject to Section 4.1 of the Purchase Agreement,
all certificates evidencing the shares to be issued to the Holder may bear the following legend:

“[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS.”

     5. ADJUSTMENT OF EXERCISE PRICE AND SHARES.

          (a) In the event of changes in the outstanding Common Stock of the Company by reason of stock
dividends, split-ups, recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, consolidation, acquisition of the Company (whether
through merger or acquisition of substantially all the assets or stock of the Company), or the
like, the number, class and type of shares available under the Warrant in the aggregate and the
Exercise Price shall be correspondingly adjusted to give the Holder of the Warrant, on exercise for
the same aggregate Exercise Price, the total number, class, and type of shares or other property as
the Holder would have owned had the Warrant been exercised prior to the event and had the Holder
continued to hold such shares until the event requiring adjustment. The form of this Warrant need
not be changed because of any adjustment in the number of Exercise Shares subject to this Warrant.

          (b) If at any time or from time to time the holders of Common Stock of the Company (or any
shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall
have received or become entitled to receive, without payment therefor,

               (i) Common Stock or any shares of stock or other securities which are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe
for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution
(other than a dividend or distribution covered in Section 5(a) above),

               (ii) any cash paid or payable otherwise than as a cash dividend or

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               (iii) Common Stock or additional stock or other securities or property (including cash) by way
of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement
(other than shares of Common Stock pursuant to Section 5(a) above), then and in each such case, the
Holder hereof will, upon the exercise of this Warrant, be entitled to receive, in addition to the
number of shares of Common Stock receivable thereupon, and without payment of any additional
consideration therefor, the amount of stock and other securities and property (including cash in
the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of
such exercise had such Holder been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares or all other
additional stock and other securities and property.

          (c) Upon the occurrence of each adjustment pursuant to this Section 5, the Company at its
expense will, at the written request of the Holder, promptly compute such adjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a
statement of the adjusted Exercise Price and adjusted number or type of Exercise Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing the transactions
giving rise to such adjustments and showing in detail the facts upon which such adjustment is
based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s transfer agent.

     6. FRACTIONAL SHARES. No fractional shares shall be issued upon the exercise of this Warrant
as a consequence of any adjustment pursuant hereto. All Exercise Shares (including fractions)
issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the
exercise would result in the issuance of any fractional share. If, after aggregation, the exercise
would result in the issuance of a fractional share, the Company shall, in lieu of issuance of any
fractional share, pay the Holder otherwise entitled to such fraction a sum in cash equal to the
product resulting from multiplying the then current fair market value of an Exercise Share by such
fraction.

     7. FUNDAMENTAL TRANSACTIONS. If, at any time while this Warrant is outstanding, (i) the
Company effects any merger of the Company with or into another entity, (ii) the Company effects any
sale of all or substantially all of its assets in one or a series of related transactions, (iii)
any tender offer or exchange offer (whether by the Company or another individual or entity) is
completed pursuant to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property or (iv) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock covered by Section 5 above) (in any such case,
a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder,
(a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or
acquiring corporation or of

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the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock
for which this Warrant is exercisable immediately prior to such event. For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such
Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one
share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise
Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental Transaction, then the
Holder shall be given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction. To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing
provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.
The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the provisions of this
Section 7 and insuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

     8. NO STOCKHOLDER RIGHTS. This Warrant in and of itself shall not entitle the Holder to any
voting rights or other rights as a stockholder of the Company.

     9. TRANSFER OF WARRANT. Subject to applicable laws and the restriction on transfer set forth
on the first page of this Warrant and set forth in the Purchase Agreement, this Warrant and all
rights hereunder are transferable, by the Holder in person or by duly authorized attorney, upon
delivery of this Warrant and the form of assignment attached hereto to any transferee designated by
Holder. The transferee shall sign an investment letter in form and substance reasonably
satisfactory to the Company and its counsel.

     10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost, stolen, mutilated
or destroyed, the Company may, on such terms as to indemnity or otherwise as it may reasonably
impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a
new Warrant of like denomination and tenor as the Warrant so lost, stolen, mutilated or destroyed.
Any such new Warrant shall constitute an original contractual obligation of the Company, whether or
not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.

     11. NOTICES, ETC. All notices required or permitted hereunder shall be in writing and shall
be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent
by confirmed telex or facsimile if sent during normal business

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hours of the recipient, if not, then on the next business day, (c) five days after having been
sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day
after deposit with a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company at the address
listed on the signature page hereto and to Holder at the applicable address set forth on the
applicable signature page to the Purchase Agreement or at such other address as the Company or
Holder may designate by 10 days advance written notice to the other parties hereto.

     12. ACCEPTANCE. Receipt of this Warrant by the Holder shall constitute acceptance of and
agreement to all of the terms and conditions contained herein.

     13. GOVERNING LAW. This Warrant and all rights, obligations and liabilities hereunder shall
be governed by the laws of the State of New York.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized
officer as of February ___, 2006.

	 	 	 	 	 
	 	 	ENTREMED, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Name: James S. Burns
	 	 	Title: President & Chief Executive Officer
	 
	 	 	 	 
	 	 	9640 Medical Center Drive

	 	 	Rockville, MD 20850

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NOTICE OF EXERCISE

TO: ENTREMED, INC.

     (1) o The undersigned hereby elects to purchase            shares of the Common Stock
of ENTREMED, INC. (the “Company”) pursuant to the terms of the attached Warrant, and tenders
herewith payment of the exercise price in full, together with all applicable transfer taxes, if
any.

          o The undersigned hereby elects to purchase            shares of Common Stock of the
Company pursuant to the terms of the net exercise provisions set forth in Section 2.1 of the
attached Warrant, and shall tender payment of all applicable transfer taxes, if any.

     (2) Please issue a certificate or certificates representing said shares of Common Stock of the
Company in the name of the undersigned or in such other name as is specified below:

(Name)

(Address)

     (3) The undersigned represents that (i) the aforesaid shares of Common Stock are being
acquired for the account of the undersigned and not with a view to, or for resale in connection
with, the distribution thereof and that the undersigned has no present intention of distributing or
reselling such shares, other than as contemplated by Article 6 of the Securities Purchase Agreement
dated as of February ___, 2006, by and among the Company and the purchasers named therein (the
“Purchase Agreement”); (ii) the undersigned is aware of the Company’s business affairs and
financial condition and has acquired sufficient information about the Company to reach an informed
and knowledgeable decision regarding its investment in the Company; (iii) the undersigned is
experienced in making investments of this type and has such knowledge and background in financial
and business matters that the undersigned is capable of evaluating the merits and risks of this
investment and protecting the undersigned’s own interests; (iv) the undersigned understands that
the shares of Common Stock issuable upon exercise of this Warrant have not been registered (except
to the extent a registration statement pursuant to and as contemplated by Article 6 of the Purchase
Agreement is effective) under the Securities Act of 1933, as amended (the “Securities Act”), by
reason of a specific exemption from the registration provisions of the Securities Act, which
exemption depends upon, among other things, the bona fide nature of the investment intent as
expressed herein, and, because such securities have not been registered under the

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Securities Act, they must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available; (v) the undersigned is aware
that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted under the
Securities Act unless certain conditions are met and until the undersigned has held the shares for
the number of years prescribed by Rule 144, that among the conditions for use of the Rule is the
availability of current information to the public about the Company; and (vi) the undersigned
agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock
unless and until there is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided upon the Company’s reasonable request, an opinion of
counsel satisfactory to the Company, stating that such registration is not required.

	(Date)	 	 	 	(Signature)

(Print
name)

-14-

 

ASSIGNMENT FORM

     (To assign the foregoing Warrant, execute this form and supply required information. Do not
use this form to purchase shares.)

     FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned
to

	 	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Please Print)
	 
	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	(Please Print)
	 
	 	 	 	 
	Dated:

	 	, 20	 	 

Holder’s Signature:

Holder’s Address:

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the
face of the Warrant, without alteration or enlargement or any change whatever. Officers of
corporations and those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.

-15-exv10w1

 

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

     This Securities Purchase Agreement (this “Agreement”) is dated as of February 2, 2006 by and
among EntreMed, Inc., a Delaware corporation (the “Company”), and each purchaser identified on the
signature pages hereto (each, a “Purchaser” and collectively, the “Purchasers”).

     WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended, the Company desires to issue and sell to
each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the
Company, certain securities of the Company as more fully described in this Agreement.

     WHEREAS, each Purchaser, severally and not jointly, wishes to purchase, and the Company wishes
to sell, upon the terms and conditions stated in this Agreement, (i) that aggregate number of
shares of the common stock, par value $0.01 per share, of the Company
(the “Common Stock”), set
forth below such Purchaser’s name on the signature page of this Agreement (which aggregate amount
for all Purchasers together shall be 12,972,966 shares of Common Stock and shall collectively be
referred to as the “Shares”) and (ii) warrants, in substantially the form attached hereto as
Exhibit A (the “Warrants”) to acquire up to that number of additional shares of Common Stock set
forth below such Purchaser’s name on the signature page attached hereto (the shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants, collectively the “Underlying
Shares”).

     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 of the Purchasers agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the
following terms have the meanings indicated:

          “Advance Indemnification Payment” has the meaning set forth in Section 6.4(c).

          “Advice” has the meaning set forth in Section 6.5.

   “Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a Person, as
such terms are used in and construed under Rule 144.

          “Allowable Suspension Period” has the meaning set forth in Section 6.1(e).

 

 

          “Business Day” means any day other than Saturday, Sunday or other day on which
commercial banks in The City of New York are authorized or required by law to remain closed.

          “Closing” means the closing of the purchase and sale of the Shares and the Warrants
pursuant to Section 2.1.

          “Closing Date” means the date of the Closing.

          “Commission” means the Securities and Exchange Commission.

          “Common Stock” has the meaning set forth in the Preamble and also includes any
securities into which the Common Stock may hereafter be reclassified.

          “Company Counsel” means Arnold & Porter LLP.

          “Disposition” has the meaning set forth in Section 3.2(g).

          “Disclosure Materials” has the meaning set forth in Section 3.1(g).

          “Effective Date” means the date that the Registration Statement is first declared
effective by the Commission.

          “Effectiveness Period” has the meaning set forth in Section 6.1(b).

          “Eligible Market” means any of the New York Stock Exchange, the American Stock
Exchange, the NASDAQ National Market or The NASDAQ Capital Market.

          “Evaluation Date” has the meaning set forth in Section 3.1(p).

          “Event” has the meaning set forth Section 6.1(d).

          “Event Payment” has the meaning set forth in Section 6.1(d).

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

          “Filing Date” means the 45th day following the Closing Date.

          “GAAP” has the meaning set forth in Section 3.1(g).

          “Legal Counsel” has the meaning set forth in Section 6.1(g).

          “Lien” means any lien, charge, claim, security interest, encumbrance, right of first
refusal or other restriction.

          “Loss” has the meaning set forth in Section 6.4(a).

          “Material Adverse Effect” has the meaning set forth in Section 3.1(b).

2

 

          “Plan of Distribution” has the meaning set forth in Section 6.1(a), and as set
forth in Exhibit E.

          “Person” means any 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 any court or other federal, state, local
or other governmental authority or other entity of any kind.

          “Proceeding” means an action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as a deposition), whether
commenced or threatened.

          “Prospectus” means the prospectus included in the Registration Statement (including,
without limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.

          “Registrable Securities” means any Common Stock (including Underlying Shares) issued or
issuable pursuant to the Transaction Documents, together with any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization or similar
event with respect to the foregoing.

          “Registration Statement” means each registration statement required to be filed under
Article VI, including (in each case) the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.

          “Required Effectiveness Date” means the earliest of (i) in the event the Registration
Statement is not subject to a full review by the Commission, the 90th day
following the Closing Date, (ii) in the event the Registration Statement is subject to a
full review by the Commission, the 120th day following the Closing Date, and
(iii) the 5th day following the date the Company learns that no review of the
Registration Statement will be made by the staff of Commission or that the staff of the
Commission has no further comments on the Registration Statement and the Company may request
acceleration of effectiveness.

          “Rule 144,” “Rule 415,” and “Rule 424” means Rule 144, Rule 415 and Rule 424,
respectively, promulgated by the Commission pursuant to the Securities Act, as such Rules
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.

          “SEC Reports” has the meaning as set forth in Section 3.1(g).

3

 

          “Securities” means, collectively, the Shares, the Warrants and the Underlying Shares.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Shares” has the meaning set forth in the preamble.

          “Short Sales” means, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act , whether or not against the box,
and all types of direct and indirect stock pledges, forward sale contracts, options, puts,
calls, short sales, swaps “put equivalent positions” (as defined in Rule 16a-1(h) under the
Exchange Act) and similar arrangements (including on a total return basis), and sales and
other transactions through non-U.S. broker-dealers or foreign regulated brokers.

          “Subsidiary” means any Person in which the Company, directly or indirectly, owns
capital stock or holds an equity or similar interest that are required to be listed in
Schedule 3.1(a).

          “Trading Day” means (a) any day on which the Common Stock is listed or quoted and
traded on its primary Trading Market, (b) if the Common Stock is not then listed or quoted
and traded on any Eligible Market, then a day on which trading occurs on the OTC Bulletin
Board (or any successor thereto), or (c) if trading does not occur on the OTC Bulletin
Board (or any successor thereto), any Business Day.

          “Trading Market” means the NASDAQ National Market or any other Eligible Market on which
the Common Stock is then listed or quoted.

          “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, or any other transfer
agent selected by the Company.

          ”Transfer Agent Instructions” means the Irrevocable Transfer Agent Instructions, in the
form of Exhibit F, executed by the Company and delivered to and acknowledged in
writing by the Transfer Agent.

          “Underlying Shares” has the meaning set forth in the Preamble.

          “Warrants” has the meaning set forth in the Preamble.

ARTICLE II

PURCHASE AND SALE

     2.1 Closing. Subject to the terms and conditions set forth in this Agreement, at the
Closing the Company shall issue and sell to each Purchaser, and each Purchaser shall, severally and
not jointly, purchase from the Company, such number of shares of Common Stock and a

4

 

Warrant to purchase a number of Underlying Shares, each as indicated below such Purchaser’s
name on the signature page of this Agreement, for an aggregate purchase price for such Purchaser as
indicated below such Purchaser’s name on the signature page of this Agreement. The Closing shall
take place at the offices of Arnold & Porter LLP immediately upon satisfaction of the conditions to
Closing set forth below, or at such other location or time as the parties may agree.

       2.2 Closing Deliveries.

               (a) At the Closing, the Company shall deliver or cause to be delivered to each Purchaser the
following:

                    (i) one or more stock certificates, free and clear of all restrictive and other legends
(except as expressly provided in Section 4.1(a) hereof), evidencing the number of
Shares indicated below such Purchaser’s name on the signature page of this Agreement,
registered in the name of such Purchaser;

                    (ii) a Warrant, registered in the name of such Purchaser, pursuant to which such
Purchaser shall have the right to acquire the number of Underlying Shares indicated below
such Purchaser’s name on the signature page of this Agreement, on the terms set forth
therein;

                    (iii) a legal opinion of Company Counsel, in the form of Exhibit C, executed by such
counsel and delivered to the Purchasers; and

                    (iv) final Schedules called for by Section 3.1, which Schedules shall be
reasonably satisfactory in form and substance to each Purchaser in its sole discretion.

               (b) At the Closing, each Purchaser shall severally, and not jointly, purchase from the
Company, Shares in the amount indicated below such Purchaser’s name on the applicable signature
page hereto and Warrants to purchase Underlying Shares in the amount indicated below such
Purchaser’s name on the applicable signature page hereto, in exchange for the cash consideration
set forth as the “Purchase Price” indicated below such Purchaser’s name on the applicable
signature page hereto. The portion of the “Purchase Price” attributable to the Common Shares is
$2.25 per share and the portion of the “Purchase Price” attributable to each full Warrant to
purchase shares of the Common Stock is $0.125 per Warrant. Each Purchaser further agrees to
deliver to the Company a purchaser questionnaire in the form attached hereto as Exhibit B.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

       3.1 Representations and Warranties of the Company. The Company hereby represents and
warrants to each of the Purchasers as follows:

               (a) Subsidiaries. The Company has no direct or indirect Subsidiaries other than
those listed in Schedule 3.1(a). Except as disclosed in Schedule 3.1(a), the
Company owns, directly or indirectly, all of the capital stock or comparable equity interests of
each

5

 

Subsidiary free and clear of any Lien, and all the issued and outstanding shares of capital
stock or comparable equity interests of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights.

               (b) Organization and Qualification. Each of the Company and the Subsidiaries is an
entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or organization (as applicable), with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing
as a foreign corporation or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, could not reasonably be expected to,
individually or in the aggregate, (i) adversely affect the legality, validity or enforceability
of any Transaction Document, (ii) have or result in a material adverse effect on the results of
operations, assets, prospects, business or condition (financial or otherwise) of the Company and
the Subsidiaries, taken as a whole, or (iii) adversely impair the Company’s ability to perform
fully on a timely basis its obligations under any of the Transaction Documents (any of (i), (ii)
or (iii), a “Material Adverse Effect”).

               (c) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all
necessary action on the part of the Company and no further consent or action is required by the
Company, its Board of Directors or its stockholders. Each of the Transaction Documents has been
(or upon delivery will be) duly executed by the Company and is, or when delivered in accordance
with the terms hereof, will constitute, the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.

               (d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of
time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is
a party or by which any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree
or other restriction of any court or governmental authority to which the Company or a Subsidiary
is subject (including federal and state securities laws and regulations and the rules and
regulations of any self-regulatory organization to which the

6

 

Company or its securities are subject), or by which any property or asset of the Company or
a Subsidiary is bound or affected, except in the case of clauses (ii) and (iii), such as would
not, individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

               (e) Issuance of the Securities. The Shares and Underlying Shares are duly
authorized and, when issued and paid for in accordance with the Transaction Documents, will be
duly and validly issued, fully paid and nonassessable, free and clear of all Liens and, except as
disclosed in Schedule 3.1(e), shall not be subject to preemptive rights or similar rights
of stockholders. Assuming the accuracy of the representations and warranties of the Purchasers,
the Securities will be issued in compliance with all applicable federal and state securities
laws. The Company has reserved from its duly authorized capital stock
the maximum number of shares of Common Stock issuable upon exercise of the Warrants.

               (f) Capitalization. The number of shares and type of all authorized, issued and
outstanding capital stock, options and other securities of the Company (whether or not presently
convertible into or exercisable or exchangeable for shares of capital stock of the Company) is
set forth in Schedule 3.1(f). All outstanding shares of capital stock are duly
authorized, validly issued, fully paid and nonassessable and have been issued in compliance in
all material respects with all applicable securities laws. Except as disclosed in Schedule
3.1(f), there are no outstanding options, warrants, script rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe
for or acquire, any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become
bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common
Stock. Except as disclosed in Schedule 3.1(f) or any Schedule 13D or Schedule 13G on
file with the Commission, there are no anti-dilution or price adjustment provisions contained in
any security issued by the Company (or in any agreement providing rights to security holders) and
the issue and sale of the Securities (including the Underlying Shares) will not obligate the
Company to issue shares of Common Stock or other securities to any Person (other than the
Purchasers) and will not result in a right of any holder of Company securities to adjust the
exercise, conversion, exchange or reset price under such securities. To the knowledge of the
Company, except as specifically disclosed in Schedule 3.1(f), no Person or group of
related Persons beneficially owns (as determined pursuant to Rule 13d-3 under the Exchange Act),
or has the right to acquire, by agreement with or by obligation binding upon the Company,
beneficial ownership of in excess of 5% of the outstanding Common Stock, ignoring for such
purposes any limitation on the number of shares of Common Stock that may be owned at any single
time.

               (g) SEC Reports; Financial Statements. The Company has filed all reports required
to be filed by it under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required
by law to file such material) (the foregoing materials, together with any materials filed by the
Company under the Exchange Act whether or not required being collectively referred to herein as
the “SEC Reports” and, together with this Agreement and the Schedules to this Agreement, the
“Disclosure Materials”) on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to

7

 

the expiration of any such extension. As of their respective dates, the SEC Reports
complied as to form in all material respects with the requirements of the Exchange Act and the
rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, 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 the light
of the circumstances under which they were made, not misleading. The financial statements of the
Company included in the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes
thereto, and fairly present in all material respects the financial position of the Company and
its consolidated subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. All material agreements to which the Company or any
Subsidiary is a party or to which the property or assets of the Company or any Subsidiary are
subject are included as part of or specifically identified in the SEC Reports.

               (h) Material Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in the SEC Reports or in
Schedule 3.1(h), (i) there has been no event, occurrence or development that,
individually or in the aggregate, has had or that would reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice that individually or in the aggregate, have not had and
would not reasonably be expected to result in a Material Adverse Effect and (B) liabilities in
the amounts accrued or reserved against in the balance sheet contained in the latest audited
financial statements included within the SEC Reports, (iii) the Company has not altered its
method of accounting or the identity of its auditors except as disclosed in the SEC Reports, (iv)
the Company has not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock, and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock-based plans.

               (i) Filings, Consents and Approvals. Neither the Company nor any Subsidiary is
required to obtain any consent, waiver, authorization or order of, give any notice to, or make
any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the
Company of any Transaction Documents, other than (i) applicable Nasdaq notices, (ii) the filing
of the Registration Statement as contemplated by Article VI hereof, (iii) Form D and filings
pursuant to applicable Blue Sky filings, if any, and (iv) in all other cases where the failure to
obtain such consent, waiver, authorization or order, or to give such notice or make such filing
or registration would not have or result in, individually or in the aggregate, a Material Adverse
Effect.

8

 

               (j) Certain Fees. No person or entity will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or upon the Company or
a Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company, other than SG Cowen & Co., LLC as
lead placement agent and Rodman & Renshaw, LLC as co-placement agent with respect to the offer
and sale of the Securities.

               (k) Private Placement. Assuming the accuracy of the representations and warranties
of the Purchasers contained in this Agreement, the offer and sale of the Securities to the
Purchasers as contemplated hereby is exempt from the registration requirements of the Securities
Act. Neither the Company nor any Person acting on the Company’s behalf has sold or offered to
sell or solicited any offer to buy the Securities by means of any form of general solicitation or
advertising. Neither the Company nor any of its Affiliates nor any Person acting on the
Company’s behalf has, directly or indirectly, at any time within the past six months, made any
offer or sale of any security or solicitation of any offer to buy any security under
circumstances that would (i) eliminate the availability of the exemption from registration under
Regulation D under the Securities Act in connection with the offer and sale of the Securities as
contemplated hereby or (ii) cause the offering of the Securities pursuant to the Transaction
Documents to be integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions, including, without limitation, under the
rules and regulations of any Trading Market. The issuance and sale of the Securities hereunder
and under the Warrants do not in any material respect conflict with or violate any rules or
regulations of any Trading Market. The Company is not, and is not an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended.

               (l) Form S-3 Eligibility. The Company is eligible to register its Common Stock for
resale by the Purchasers using Form S-3 promulgated under the Securities Act.

               (m) Listing and Maintenance Requirements. Except as a specified in the SEC Reports,
the Company has not, in the two years preceding the date hereof, received written notice from any
Trading Market on which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of such Trading Market.
The Company is, and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance requirements.

               (n) Registration Rights. Except as described in Schedule 3.1(n), the
Company has not granted or agreed to grant to any Person any rights (including “piggy-back”
registration rights) to have any securities of the Company registered with the Commission or any
other governmental authority that have not been satisfied.

               (o) Disclosure. The Company confirms that neither it nor any other Person acting on
its behalf has provided any of the Purchasers or their agents or counsel with any information
that constitutes or might constitute material, nonpublic information. The Company understands
and confirms that each of the Purchasers will rely on the foregoing representations in effecting
transactions in securities of the Company. All disclosure

9

 

materials provided to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on
behalf of the Company are true and correct and do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or any of its
Subsidiaries or its or their business, properties, prospects, operations or financial conditions,
which, under applicable law, rule or regulation, requires public disclosure or announcement by
the Company but which has not been so publicly announced or disclosed, except for the
announcement of this Agreement. The Company acknowledges and agrees that no Purchaser makes or
has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3.2 hereof.

               (p) Sarbanes-Oxley; Disclosure Controls and Procedures. The Company is in
compliance in all material respects with all of the provisions of the Sarbanes-Oxley Act of 2002
that are applicable to it. Except as disclosed in the SEC Reports, the Company has established
and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) that are effective in all material respects to ensure that material information
relating to the Company is made known to its chief executive officer and chief financial officer
by others within the Company. The Company’s certifying officers have evaluated the effectiveness
of the Company’s disclosure controls and procedures as of the end of the period covered by its
most recently filed quarterly or annual periodic report under the Exchange Act (such date, the
“Evaluation Date”). The Company presented in its most recently filed quarterly or annual
periodic report under the Exchange Act the conclusions of the certifying officers about the
effectiveness of the Company’s disclosure controls and procedures based on their evaluations as
of the Evaluation Date. Since the Evaluation Date, there has been no change in the Company’s
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting.

               (q) All Necessary Permits, etc. Except as otherwise disclosed in the SEC Reports,
the Company possesses such valid and current certificates, authorizations or permits issued by
appropriate federal or state regulatory agencies or bodies necessary to conduct its business as
it is now being conducted, except where the failure to possess such certificates, authorizations
or permits would not be reasonably expected to result in a Material Adverse Effect. The Company
has not received any notice of proceedings relating to the revocation or modification of, or
non-compliance with, any such certificate, authorization or permit which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.

               (r) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company has
been advised, and acknowledges and agrees, that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that no Purchaser is acting as a financial
advisor or fiduciary of the Company or, to the knowledge of the Company, any other Purchaser (or
in any similar capacity) with respect to this Agreement and the transactions contemplated hereby
and any advice given by any Purchaser or any of their

10

 

respective representatives or agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to such Purchaser’s purchase of the Securities. The
Company further represents to each Purchaser that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

               (s) Use of Proceeds. The proceeds of the sale of the Shares and the Warrants
hereunder shall be used by the Company for working capital and general corporate purposes.

     3.2 Representations and Warranties of the Purchasers. Each Purchaser hereby, as to
itself only and for no other Purchaser, represents and warrants to the Company as follows:

               (a) Organization; Authority. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization with the
requisite corporate or partnership power and authority to enter into and to consummate the
transactions contemplated by the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The purchase by such Purchaser of the Shares and the Warrants hereunder
has been duly authorized by all necessary action on the part of such Purchaser. This Agreement
has been duly executed and delivered by such Purchaser and constitutes the valid and binding
obligation of such Purchaser, enforceable against it in accordance with its terms.

               (b) Investment Intent. Such Purchaser is acquiring the Securities as principal for
its own account and not with a view to or for distributing or reselling such Securities or any
part thereof, without prejudice, however, to such Purchaser’s right, subject to the provisions of
this Agreement, at all times to sell or otherwise dispose of all or any part of such Securities
pursuant to an effective registration statement under the Securities Act or under an exemption
from such registration and in compliance with applicable federal and state securities laws.
Nothing contained herein shall be deemed a representation or warranty by such Purchaser to hold
Securities for any period of time. Such Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities.

               (c) Purchaser Status. At the time such Purchaser was offered the Shares and the
Warrants, it was, and at the date hereof it is, an “accredited investor” as defined in Rule
501(a) under the Securities Act.

               (d) Experience of such Purchaser. Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business and financial
matters so as to be capable of evaluating the merits and risks of the prospective investment in
the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is
able to bear the economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.

               (e) Access to Information. Such Purchaser acknowledges that it has reviewed the
Disclosure Materials and has been afforded (i) the opportunity to ask such

11

 

questions as it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of the offering of the Securities and the merits and
risks of investing in the Securities; (ii) access to information about the Company and the
Subsidiaries and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its investment; and
(iii) the opportunity to obtain such additional information that the Company possesses or can
acquire without unreasonable effort or expense that is necessary to make an informed investment
decision with respect to the investment. Such Purchaser further acknowledges that the Company
has offered to provide additional nonpublic information regarding its financial condition,
results of operations, business, properties, assets, liabilities, management, projections,
appraisals, plans, prospects and proposals. Such Purchaser has declined to receive such
nonpublic information and acknowledges and agrees that in deciding to purchase the Securities
from the Company, it took into account the facts set forth in the immediately preceding sentence
and fully factored such matters into the price and terms it was willing to offer in payment for
the Securities. Nothing contained in this Section 3.2 nor any other investigation
conducted by or on behalf of such Purchaser or its representatives or counsel shall modify, amend
or affect such Purchaser’s right to rely on the truth, accuracy and completeness of the
Disclosure Materials and the Company’s representations and warranties contained in the
Transaction Documents.

               (f) Illegal Transactions. Purchaser has not directly or indirectly, nor has any
Person acting on behalf of or pursuant to any understanding with such Purchaser, engaged in any
transactions in the Company’s securities (including, without limitation, any Short Sales
involving the Company’s securities) since the time that such Purchaser was first contacted by the
Company, SG Cowen & Co., LLC, Rodman & Renshaw, LLC or any other Person regarding the
transactions contemplated hereby. Such Purchaser covenants that neither it nor any of its
Affiliates or any Person acting on its or its Affiliates’ behalf or pursuant to any understanding
with such Purchaser or its Affiliates will engage, directly or indirectly, in any transactions in
the securities of the Company (including Short Sales) prior to the time that the transactions
contemplated by this Agreement are publicly disclosed.

               (g) Dispositions. Purchaser will not, prior to the effectiveness of the
Registration Statement, if then prohibited by law or regulation: (i) sell, offer to sell, solicit
offers to buy, dispose of, loan, pledge or grant any right with respect to (collectively, a
“Disposition”) the Securities; or (ii) engage in any hedging or other transaction which is
designed or could reasonably be expected to lead to or result in a Disposition of Securities by
such Purchaser or an Affiliate. In addition, Purchaser agrees that for so long as it owns any
Shares, it will not enter into any short sale of the Common Stock executed at a time when the
Purchaser has no equivalent offsetting long position in the Common Stock. For purposes of
determining whether the Purchaser has an equivalent offsetting long position in the Common Stock,
 shares of Common Stock that the Purchaser is entitled to receive within 60 days (whether pursuant
to contract or upon conversion or exercise of convertible securities) will be included as if held
long by the Purchaser.

               (h) No Legal, Tax or Investment Advice. Such Purchaser understands that nothing in
this Agreement or any other materials presented to such Purchaser in connection with the purchase
and sale of the Common Shares and the Warrants constitutes legal, tax or

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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 Common Shares and the Warrants.

               (i) Confidentiality. Such Purchaser will hold in confidence all information
concerning this Agreement and the placement of the Securities hereunder until the earlier of such
time as (a) the Company has made a public announcement concerning the Agreement and the placement
of the Securities hereunder or (b) this Agreement is terminated pursuant to Section 7.1 hereof,
unless disclosure is required by legal or regulatory process.

               (j) Foreign Investors. If such Purchaser is not a United States person (as defined
by Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended), such Purchaser hereby
represents that it has satisfied itself as to the full observance of the laws of its jurisdiction
in connection with any invitation to subscribe for the Securities or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of the Securities,
(ii) any foreign exchange restrictions applicable to such purchase or acquisition, (iii) any
government or other consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer
of the Securities. Such Purchaser’s subscription and payment for and continued beneficial
ownership of the Securities will not violate any applicable securities or other laws of
Purchaser’s jurisdiction.

               (k) Reliance on Exemptions. Such Purchaser understands that the Securities are
being offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying
in part upon the truth and accuracy of, and such Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of such Purchaser set
forth herein in order to determine the availability of such exemptions and the eligibility of
such Purchaser to acquire such securities.

ARTICLE IV

RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;

COMPLIANCE WITH SECURITIES ACT

     4.1 Legend.

               (a) Purchaser understands that, until the Effective Date or such time as the Securities may
be sold pursuant to Rule 144 under the Securities Act (“Rule 144”) without any restriction as to
the number of securities as of a particular date that can then be immediately sold, the
Securities may bear a restrictive legend in substantially the following form (and a stop transfer
order may be placed against transfer of the certificates for the Shares):

[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE] HAVE [NOT] BEEN

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REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

               (b) Certificates evidencing Securities shall not be required to contain such legend or any
other legend (i) while a Registration Statement covering the resale of such Securities is
effective under the Securities Act, or (ii) following any sale of such Securities pursuant to
Rule 144, or (iii) if such Securities are eligible for sale under Rule 144(k), or (iv) if such
legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Commission). The Company shall
deliver the Transfer Agent Instructions attached hereto as Exhibit F to the Transfer
Agent on the Effective Date. The Company agrees that at such time as such legend is no longer
required under this Section 4.1, it will, no later than three Trading Days following the
delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate
representing Shares or Underlying Shares, as applicable, issued with a restrictive legend,
deliver or cause to be delivered to such Purchaser a certificate representing such shares that is
free from any restrictive legends. The Company shall not make any notation on its
records or give instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section 4.1. Certificates for Securities subject to legend
removal hereunder shall be transmitted by the transfer agent of the Company to the Purchasers by
crediting the account of the Purchaser’s prime broker with the Depository Trust Company. All
costs and expenses related to the removal of the legends and the reissuance of any Securities
shall be borne by the Company.

               (c) The Securities shall not be transferable in the absence of a registration under the
Securities Act or an exemption therefrom. Each Purchaser, severally and not jointly with the
other Purchasers, agrees that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the Company’s
reliance that the Purchaser will sell any Securities pursuant to either (i) the registration
requirements of the Securities Act and such Purchaser shall have delivered a current prospectus
in connection with such sale or shall have confirmed that a current prospectus is deemed to be
delivered in connection with such sale, or (ii) an exemption therefrom.

          4.2 Instruction Sheet. Each certificate representing Registrable Shares shall bear
the Instruction Sheet attached hereto as Exhibit D (in addition to any legends required under
applicable securities laws).

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          4.3 Transfer of Securities.

               (a) Each Purchaser hereby covenants with the Company not to make any sale of the Securities
except:

               (i) in accordance with the Registration Statement, in which case such Purchaser shall have
delivered a current prospectus in connection with such sale, or confirmed that a current
prospectus is deemed to be delivered in connection with such sale; or

               (ii) in accordance with Rule 144, in which case Purchaser covenants to comply with Rule 144;
or

               (iii)(A) If the transferee has agreed in writing to be bound by the terms of this Agreement
and (B) such Purchaser shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration of such shares
under the Securities Act.

               (b) Notwithstanding the provisions of subsection (a) above, no such restriction shall apply
to a transfer by a Purchaser that is (i) a partnership transferring to its partners or former
partners in accordance with partnership interests, (ii) a corporation transferring to a
wholly-owned subsidiary or a parent corporation that owns all of the capital stock of the
Purchaser, (iii) a limited liability company transferring to its members or former members in
accordance with their interest in the limited liability company or (iv) an individual
transferring to the Purchaser’s family member or trust for the benefit of an individual Purchaser
and/or the Purchaser’s family member; provided that in each case the transferee will agree in
writing to be subject to the terms of this Agreement to the same extent as if such transferee
were an original Purchaser hereunder.

               (c) Purchaser further acknowledges and agrees that, if a Purchaser is selling the Securities
using the prospectus forming a part of the Registration Statement, such Securities are not
transferable on the books of the Company unless the certificate evidencing such Securities is
submitted to the Company’s transfer agent.

          4.4 Purchaser Information. Each Purchaser covenants that it will promptly notify the
Company of any change in the information set forth in the Registration Statement regarding such
Purchaser or such Purchaser’s “plan of distribution”, to the extent such change is required to be
disclosed under applicable federal securities laws.

          4.5 Furnishing of Information. As long as any Purchaser owns Securities, the Company
covenants to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to the
Exchange Act. Upon the request of any Purchaser, the Company shall deliver to such Purchaser a
written certification of a duly authorized officer as to whether it has complied with the preceding
sentence. As long as any Purchaser or transferee owns Securities, if the Company is not required to
file reports pursuant to such laws, it will prepare and furnish to the Purchasers and make publicly
available in accordance with paragraph (c) of Rule 144 such information as is required for the
Purchasers to sell the Securities under Rule 144. The Company

15

 

further covenants that it will take such further action as any holder of Securities may
reasonably request to satisfy the provisions of Rule 144 applicable to the issuer of securities
relating to transactions for the sale of securities pursuant to Rule 144.

          4.6 Integration. The Company shall not, and shall use its reasonable best efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities to the Purchasers, or that
would be integrated with the offer or sale of the Securities for purposes of the rules and
regulations of any Trading Market.

          4.7 Reservation of Securities. The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount
as may be required to fulfill its obligations in full under the Transaction Documents. In the
event that at any time the then authorized shares of Common Stock are insufficient for the Company
to satisfy its obligations in full under the Transaction Documents, the Company shall promptly take
such actions as may be required to increase the number of authorized shares. The Company shall
file an additional shares listing application with the Trading Market to cover the Securities
following the Closing Date.

          4.8 Securities Laws Disclosure. The Company shall, on or before 9:30 a.m., New York
time, on the next business day following the execution of this Agreement, issue a press release
acceptable to the Purchasers disclosing all material terms of the transactions contemplated hereby.
In addition, the Company shall file a Current Report on Form 8-K with the Commission (the “8-K
Filing”) within the time period required thereby describing the terms of the transactions
contemplated by the Transaction Documents and including as exhibits to such Current Report on Form
8-K this Agreement and the form of Warrants, in the form required by the Exchange Act. Thereafter,
the Company shall timely file any filings and notices required by the Commission or applicable law
with respect to the transactions contemplated hereby and provide copies thereof to the Purchasers
promptly after filing. The Company shall not, and shall cause each of its Subsidiaries and its and
each of their respective officers, directors, employees and agents not to, provide any Purchaser
with any material nonpublic information regarding the Company or any of its Subsidiaries from and
after the filing of the 8-K Filing without the express written consent of such Purchaser.

ARTICLE V

CONDITIONS

          5.1 Conditions Precedent to the Obligations of the Purchasers. The obligation of each
Purchaser to acquire Securities at the Closing is subject to the satisfaction or waiver by such
Purchaser, at or before the Closing, of each of the following conditions:

               (a) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct in all material respects as of the date when
made and as of the Closing as though made on and as of such date; and

16

 

               (b) Performance. The Company and each other Purchaser shall have performed,
satisfied and complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by it at or
prior to the Closing.

          5.2 Conditions Precedent to the Obligations of the Company. The obligation of the
Company to sell Securities at the Closing is subject to the satisfaction or waiver by the Company,
at or before the Closing, of each of the following conditions:

               (a) Representations and Warranties. The representations and warranties of the
Purchasers contained herein shall be true and correct in all material respects as of the date
when made and as of the Closing Date as though made on and as of such date; and

               (b) Performance. The Purchasers shall have performed, satisfied and complied in all
material respects with all covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Purchasers at or prior to the
Closing.

ARTICLE VI

REGISTRATION RIGHTS

          6.1 Shelf Registration

               (a) As promptly as possible, and in any event on or prior to the Filing Date, the Company
shall prepare and file with the Commission a “Shelf” Registration Statement covering the resale
of all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule
415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible
to register for resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance herewith as the Purchasers may consent) and
shall contain (except if otherwise directed by the Purchasers) (the
“Plan of Distribution”)
attached hereto as Exhibit E.

               (b) The Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective by the Commission as promptly as practicable after the filing
thereof, but in any event prior to the Required Effectiveness Date, and shall use its
commercially reasonable efforts to keep the Registration Statement continuously effective under
the Securities Act until the fifth anniversary of the Effective Date or such earlier date when
all Registrable Securities covered by such Registration Statement have been sold or can be sold
publicly under Rule 144(k) by Persons who are not Affiliates of the Company (the “Effectiveness
Period”).

               (c) The Company shall notify each Purchaser in writing promptly (and in any event within one
Trading Day) after receiving notification from the Commission that the Registration Statement has
been declared effective.

               (d) Upon the occurrence of any Event (as defined below) and on every monthly anniversary
thereof until the applicable Event is cured, as partial relief for the damages suffered therefrom
by the Purchasers (which remedy shall not be exclusive of any

17

 

other remedies available under this Agreement, at law or in equity), the Company shall pay
to each Purchaser an amount in cash, as liquidated damages and not as a penalty, equal to 1% of
the aggregate purchase price paid by such Purchaser hereunder; provided, however,
that Event Payments (as defined below) shall not be payable for more than one Event occurring or
existing at any one time, and the Company shall have no liability to the Purchaser for any Event
Payments upon the occurrence of any Event, or thereafter, if such Event is caused by or results
from any action or inaction of any Purchaser. Notwithstanding the foregoing, with respect to
each individual occurrence of an Event described in clauses (ii) or (iv) of this Section
6.1(d), the Company shall have no liability to any Purchaser for the related Event Payments
beyond the first monthly anniversary after such Event has been cured. The payments to which a
Purchaser shall be entitled pursuant to this Section 6.1(d) are referred to herein as
“Event Payments”. Any Event Payments payable pursuant to the terms hereof shall apply on a
pro-rata basis for any portion of a month prior to the cure of an Event. In the event the
Company fails to make Event Payments in a timely manner, such Event Payments shall bear interest
at the rate of 1.5% per month (prorated for partial months) until paid in full.

For such purposes, each of the following shall constitute an
“Event”:

                    (i) the Registration Statement is not filed on or prior to the Filing Date or is not
declared effective on or prior to the Required Effectiveness Date;

                    (ii) after the Effective Date and during the Effectiveness Period, a Purchaser is not
permitted to sell Registrable Securities under the Registration Statement (or a subsequent
Registration Statement filed in replacement thereof) other than during an Allowable
Suspension Period for any reason for five consecutive Trading Days or an aggregate of ten
Trading Days in any twelve month period;

                    (iii) after the Effective Date and during the Effectiveness Period, any Registrable
Securities covered by such Registration Statement are not listed on an Eligible Market;

                    (iv) after the Effective Date and during the Effectiveness Period, the Common Stock is
not listed or quoted, or is suspended from trading, on an Eligible Market for a period of
five consecutive Trading Days or an aggregate of ten Trading Days in any twelve month
period;

                    (v) the Company fails for any reason to deliver a certificate evidencing any Securities
to a Purchaser within five Trading Days after delivery of such certificate is required
pursuant to any Transaction Document or the exercise rights of the Purchasers pursuant to
the Warrants are otherwise suspended for any reason; or

                    (vi) the Company fails to have available a sufficient number of authorized but unissued
and otherwise unreserved shares of Common Stock available to issue Underlying Shares upon
any exercise of the Warrants or, at any time following the Effective Date, any Shares or
Underlying Shares are not listed on an Eligible Market at such time as the Common Stock is
then listed on an Eligible Market.

18

 

               (e) Notwithstanding anything in this Agreement to the contrary, the Company may, by written
notice to the Purchasers, suspend sales under a Registration Statement after the Effective Date
thereof and/or require that the Purchasers immediately cease the sale of shares of Common Stock
pursuant thereto and/or defer the filing of any subsequent Registration Statement if the Company
is engaged in a material merger, acquisition or sale, or any pending material financing, material
corporate reorganization or other material corporate transaction that is reasonably expected to
cause a restatement of the Company’s financial statements, and the Board of Directors determines
in good faith, by appropriate resolutions, that, as a result of such sales activity it would be
materially detrimental to the Company (other than relating solely to the price of the Common
Stock). Upon receipt of such notice, each Purchaser shall immediately discontinue any sales of
Registrable Securities pursuant to such registration until such Purchaser has received copies of
a supplemented or amended Prospectus or until such Purchaser is advised in writing by the Company
that the then-current Prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference in such
Prospectus. In no event, however, shall this right be exercised to suspend sales beyond the
period during which (in the good faith determination of the Company’s Board of Directors) the
failure to require such suspension would be materially detrimental to the Company. Furthermore,
in no event may the Company exercise its rights hereunder for a period of more than 10
consecutive Trading Days or more than 45 Trading Days in any twelve month period (each, an
“Allowable Suspension Period”) and at least two Trading Days shall elapse between Allowable
Suspension Periods. Immediately after the end of any suspension period under this Section
6.1(e), the Company shall take all necessary actions (including filing any required
supplemental prospectus) to restore the effectiveness of the applicable Registration Statement
and the ability of the Purchasers to publicly resell their Registrable Securities pursuant to
such effective Registration Statement.

               (f) Except as set forth in Schedule 6.1(f), the Company shall not, prior to the
Effective Date of the Registration Statement, prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities.

               (g) The Purchasers holding at least a majority of the Registrable Securities shall have the
right to select one legal counsel to review any registration pursuant to this Article VI (“Legal
Counsel”). The Company and Legal Counsel shall reasonably cooperate with each other in
performing the Company’s obligations under this Article VI.

          6.2 Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:

               (a) Not less than five Trading Days prior to the filing of a Registration Statement or any
related Prospectus or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to
each Purchaser and Legal Counsel copies of all such documents proposed to be filed, which
documents (other than those incorporated or deemed to be incorporated by reference) will be
subject to the review of such Purchasers and Legal

19

 

Counsel, and (ii) cause its officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of
Legal Counsel, to conduct a reasonable investigation within the meaning of the Securities Act.
The Company shall not file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which Purchasers holding a majority of the Registrable Securities shall
reasonably object.

               (b) (i) Prepare and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection therewith as may
be necessary to keep the Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the Securities Act all
of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424; (iii) respond as promptly as reasonably possible, and in any event within ten days, to
any comments received from the Commission with respect to the Registration Statement or any
amendment thereto and as promptly as reasonably possible provide the Purchasers true and complete
copies of all correspondence from and to the Commission relating to the Registration Statement;
and (iv) comply in all material respects with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all Registrable Securities covered by the
Registration Statement.

               (c) Notify the Purchasers of Registrable Securities to be sold and Legal Counsel as promptly
as reasonably possible, and (if requested by any such Person) confirm such notice in writing no
later than one Trading Day thereafter, of any of the following events: (i) a Prospectus or any
Prospectus Supplement or post-effective amendment to a Registration Statement is proposed to be
filed; (ii) the Commission notifies the Company whether there will be a “review” of any
Registration Statement; (iii) the Commission comments in writing on any Registration Statement
(in which case the Company shall deliver to each Purchaser a copy of such comments and of all
written responses thereto); (iv) any Registration Statement or any post-effective amendment is
declared effective; (v) the Commission or any other Federal or state governmental authority
requests any amendment or supplement to any Registration Statement or Prospectus or requests
additional information related thereto; (vi) the Commission issues any stop order suspending the
effectiveness of any Registration Statement or initiates any Proceedings for that purpose; (vii)
the Company receives notice of any suspension of the qualification or exemption from
qualification of any Registrable Securities for sale in any jurisdiction, or the initiation or
threat of any Proceeding for such purpose; or (vii) the financial statements included in any
Registration Statement become ineligible for inclusion therein or any statement made in any
Registration Statement or Prospectus or any document incorporated or deemed to be incorporated
therein by reference is untrue in any material respect or any revision to a Registration
Statement, Prospectus or other document is required so that it will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading.

20

 

               (d) Use its commercially reasonable efforts to avoid the issuance of or, if issued, obtain
the withdrawal of (i) any order suspending the effectiveness of any Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

               (e) Furnish to each Purchaser and Legal Counsel, without charge, at least one conformed copy
of each Registration Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the Commission.

               (f) Promptly deliver to each Purchaser and Legal Counsel, without charge, as many copies of
the Prospectus or Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request. The Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by each of the selling Purchasers
in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto.

               (g) (i) In the time and manner required by each Trading Market, prepare and file with such
Trading Market an additional shares listing application covering all of the Registrable
Securities; (ii) take all steps necessary to cause such Registrable Securities to be approved for
listing on each Trading Market as soon as possible thereafter; (iii) provide to the Purchasers
evidence of such listing; and (iv) maintain the listing of such Registrable Securities on each
such Trading Market or another Eligible Market.

               (h) Prior to any public offering of Registrable Securities, use its commercially reasonable
efforts to register or qualify or cooperate with the selling Purchasers and Legal Counsel in
connection with the registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the securities or blue sky
laws of such jurisdictions within the United States as any Purchaser requests in writing, to keep
each such registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered by a Registration
Statement; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject itself to taxation
in respect of doing business in any jurisdiction in which it is not otherwise subject.

               (i) Cooperate with the Purchasers to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent permitted by this
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Purchasers may request.

21

 

               (j) Upon the occurrence of any event described in Section 6.2(c)(vii), as promptly
as reasonably possible, prepare a supplement or amendment, including a post-effective amendment,
to the Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.

               (k) Use its commercially reasonable efforts to cooperate with any due diligence
investigation undertaken by the Purchasers in connection with the sale of Registrable Securities,
including, without limitation by making available (to the extent commercially reasonable) any
documents and information; provided that the Company will not deliver or make available to any
Purchaser material, nonpublic information unless such Purchaser specifically requests in advance
to receive material, nonpublic information in writing.

               (l) Comply in all material respects with all applicable rules and regulations of the
Commission.

          6.3 Registration Expenses. The Company shall pay (or reimburse the Purchasers for)
all fees and expenses incident to the performance of or compliance with this Agreement by the
Company, including without limitation (a) all registration and filing fees and expenses, including
without limitation those related to filings with the Commission, NASDR Inc. if required to permit a
registered broker-dealer to accept sell orders from any Purchaser in the ordinary course of
business, any Trading Market and in connection with applicable state securities or Blue Sky laws,
(b) printing expenses (including without limitation expenses of printing certificates for
Registrable Securities and of printing prospectuses requested by the Purchasers), (c) messenger,
telephone and delivery expenses, (d) fees and disbursements of counsel for the Company and up to
$7,500 for Legal Counsel, and (e) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this Agreement.

          6.4 Indemnification.

               (a) Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Purchaser, the partners, members, officers and directors of each Purchaser and each
person, if any, who controls such Purchaser within the meaning of the Securities Act or the
Exchange Act, from and against any losses, claims, damages, liabilities or expenses, to which
they may become subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or Proceedings in respect thereof) arise out of, or are based
upon, any material breach of any representation, warrant, covenant or agreement made by the
Company or any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or any amendment or supplement
thereto, or any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading or arise out

22

 

of any failure by the Company to fulfill any undertaking included in the Registration
Statement and the Company will, as incurred, reimburse such Purchaser, partner, member, officer,
director or controlling person for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, Proceeding or claim; provided,
however, that the Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability (collectively, “Loss”) arises out of, or is based upon, an untrue
statement or omission or alleged untrue statement or omission made in such Registration Statement
in reliance upon and in conformity with written information furnished to the Company by or on
behalf of such Purchaser, partner, member, officer, director or controlling person specifically
for use in preparation of the Registration Statement or any breach of this Agreement by such
Purchaser; provided further, however, that the Company shall not be liable to any Purchaser of
Registrable Shares (or any partner, member, officer, director or controlling person of such
Purchaser) to the extent that any such Loss is caused by an untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus if either (i) (A) such
Purchaser failed to send or deliver a copy of the final prospectus with or prior to or failed to
confirm that a final prospectus was deemed to be delivered prior to, the delivery of written
confirmation of the sale by such Purchaser to the person asserting the claim from which such Loss
resulted and (B) the final prospectus corrected such untrue statement or omission, (ii) (X) such
untrue statement or omission is corrected in an amendment or supplement to the prospectus and (Y)
having previously been furnished by or on behalf of the Company with copies of the prospectus as
so amended or supplemented or notified by the Company that such amended or supplemented
prospectus has been filed with the SEC, such Purchaser thereafter fails to deliver such
prospectus as so amended or supplemented, with or prior to, or fails to confirm that the
prospectus as so amended or supplemented was deemed to be delivered prior to, the delivery of
written confirmation of the sale of a Registrable Share to the person asserting the claim from
which such Loss resulted or (iii) such Purchaser sold Registrable Shares in violation of such
Purchaser’s covenant contained in Section 6.5.

          (b) Indemnification by Purchasers. Each Purchaser, severally and not jointly,
agrees to indemnify and hold harmless the Company (and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
each officer of the Company who signs the Registration Statement and each director of the
Company), from and against any losses, claims, damages or liabilities to which the Company (or
any such officer, director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such losses, claims, damages or liabilities (or actions or Proceedings in
respect thereof) arise out of, or are based upon, any material breach of this Agreement by such
Purchaser or any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading in each case, on the Effective Date
thereof, if, and to the extent, such untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written information furnished by or on
behalf of such Purchaser specifically for use in preparation of the Registration Statement, and
such Purchaser will reimburse the Company (and each of its officers, directors or controlling
persons) for any legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such

23

 

action, Proceeding or claim; provided, however, that in no event shall any indemnity under
this Section 6.4(b) be greater in amount than the dollar amount of the proceeds (net of
(i) the purchase price of the Registrable Shares included in the Registration Statement giving
rise to such indemnification obligation and (ii) the amount of any damages such Purchaser has
otherwise been required to pay by reason of such untrue statement or omission or alleged untrue
statement or omission) received by such Purchaser upon the sale of such Registrable Shares,
provided further that such Purchaser shall not have any indemnification obligation hereunder if
the Loss is the result of the fraud, bad faith, gross negligence or willful misconduct of the
Company.

          (c) Indemnification Proceedings. Promptly after receipt by any indemnified person
of a notice of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 6.4, such indemnified
person shall notify the indemnifying person in writing of such claim or of the commencement of
such action, and, subject to the provisions hereinafter stated, in case any such action shall be
brought against an indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and, to the extent
that it shall wish, to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such indemnified person of its
election to assume the defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such indemnified person in
connection with the defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate in the reasonable judgment of the
indemnified person for the same counsel to represent both the indemnified person and such
indemnifying person or any Affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person; provided, further,
that no indemnifying person shall be responsible for the fees and expense of more than one
separate counsel for all indemnified parties. The indemnifying party shall not settle an action
without the consent of the indemnified party, which consent shall not be unreasonably withheld.

          If after proper notice of a claim or the commencement of any action against the indemnified
party, the indemnifying party does not choose to participate, then the indemnified party shall
assume the defense thereof and upon written notice by the indemnified party requesting advance
payment of a stated amount for its reasonable defense costs and expenses, the indemnifying party
shall advance payment for such reasonable defense costs and expenses (the “Advance
Indemnification Payment”) to the indemnified party. In the event that the indemnified party’s
actual defense costs and expenses exceed the amount of the Advance Indemnification Payment, then
upon written request by the indemnified party, the indemnifying party shall reimburse the
indemnified party for such difference; in the event that the Advance Indemnification Payment
exceeds the indemnified party’s actual costs and expenses, the indemnified party shall promptly
remit payment of such difference to the indemnifying party.

          If the indemnification provided for in this Section 6.4 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to any losses,
claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying

24

 

such indemnified party thereunder, shall to the extent permitted by applicable law contribute
to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other, as well as any other relevant
equitable considerations; provided, that in no event shall any contribution by an indemnifying
party hereunder be greater in amount than the dollar amount of the proceeds (net of (i) the
purchase price of the Registrable Shares included in the Registration Statement giving rise to such
indemnification obligation and (ii) the amount of any damages such indemnifying party has otherwise
been required to pay by reason of such untrue statement or omission or alleged untrue statement or
omission) received by such indemnifying party upon the sale of such Registrable Shares.

     6.5 Prospectus Delivery. Each Purchaser agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement. Each Purchaser further agrees
that, upon receipt of a notice from the Company of the occurrence of any event of the kind
described in Sections 6.2(c)(vi), (vii) or (viii), such Purchaser will
discontinue disposition of such Registrable Securities under the Registration Statement until such
Purchaser’s receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 6.2(j), or until it is
advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.

     6.6 No Piggyback on Registrations. Neither the Company nor any of its security
holders (other than the Purchasers in such capacity pursuant hereto) may include securities of the
Company in the Registration Statement other than the Registrable Securities.

     6.7 Piggy-Back Registrations. If at any time during the Effectiveness Period there is
not an effective Registration Statement covering all of the Registrable Securities and the Company
shall determine to prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or
their then equivalents relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in connection with stock option
or other employee benefit plans, then the Company shall send to each Purchaser written notice of
such determination and if, within fifteen days after receipt of such notice, any such Purchaser
shall so request in writing, the Company shall include in such registration statement all or any
part of such Registrable Securities such Purchaser requests to be registered.

ARTICLE VII

MISCELLANEOUS

     7.1 Termination. This Agreement may be terminated by the Company or any Purchaser, by
written notice to the other parties, if the Closing has not been consummated by the

25

 

third Trading Day following the date of this Agreement; provided that no such termination will
affect the right of any party to sue for any breach by the other party (or parties).

     7.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to
the contrary, 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. The Company shall pay all
transfer agent fees, stamp taxes and other taxes and duties levied in connection with the issuance
of the Securities.

     7.3 Entire Agreement. The Transaction Documents, together with the Exhibits and
Schedules thereto, 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. At or after the Closing, and without further consideration, the Company will execute
and deliver to the Purchasers such further documents as may be reasonably requested in order to
give practical effect to the intention of the parties under the Transaction Documents.

     7.4 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 specified in this Section prior to 6:30 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 specified in this Section on a day
that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the
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
addresses and facsimile numbers for such notices and communications are those set forth on the
signature pages hereof, or such other address or facsimile number as may be designated in writing
hereafter, in the same manner, by such Person.

     7.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the Company and each of the
Purchasers or, in the case of a waiver, by the party against whom enforcement of any such waiver 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 either party to exercise any right hereunder in any manner impair the exercise of any
such right. Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of Purchasers under
Article VI and that does not directly or indirectly affect the rights of other Purchasers
may be given by Purchasers holding at least a majority of the Registrable Securities to which such
waiver or consent relates.

     7.6 Construction. 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.

26

 

The language used in this Agreement 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.

     7.7 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 the
Purchasers. Subject to the provisions of Section 4.1 hereof, any Purchaser may assign its
rights under this Agreement to any Person to whom such Purchaser assigns or transfers any
Securities, provided such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the “Purchasers.”

     7.8 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, except that each Indemnified Party
is an intended third party beneficiary of Section 6.4 hereof and (in each case) may enforce
the provisions of such Sections directly against the parties with obligations thereunder.

     7.9 Governing Law; Venue; Waiver Of Jury Trail. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND
PURCHASERS HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT
BY THE COMPANY OR ANY PURCHASER HEREUNDER, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE
TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION
OR PROCEEDING BROUGHT BY THE COMPANY OR ANY PURCHASER, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT
TO THE JURISDICTION OF ANY SUCH COURT, OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH
PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN
ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY
WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY AND PURCHASERS HEREBY
WAIVE ALL RIGHTS TO A TRIAL BY JURY.

     7.10 Survival. The representations, warranties, agreements and covenants contained
herein shall survive the Closing and the delivery and/or exercise of the Securities, as applicable.

27

 

     7.11 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, 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 signature page were an original thereof.

     7.12 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt
to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this Agreement.

     7.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) the Transaction Documents, whenever
any Purchaser exercises a right, election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

     7.14 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, 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 and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs associated with the issuance of such
replacement Securities.

     7.15 Remedies. In addition to being entitled to exercise all rights provided herein
or granted by law, including recovery of damages, each of the Purchasers and the Company will be
entitled to specific performance under the Transaction Documents. The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in any action for
specific performance of any such obligation the defense that a remedy at law would be adequate.

     7.16 Adjustments in Share Numbers and Prices. In the event of any stock split,
subdivision, dividend or distribution payable in shares of Common Stock (or other securities or
rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date
hereof, each reference in any Transaction Document to a number of shares or a price per share shall
be amended to appropriately account for such event.

28

 

     7.17 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 of the
obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser
to purchase Shares pursuant to this Agreement has been made by such Purchaser independently of any
other Purchaser and independently of any information, materials, statements or opinions as to the
business, affairs, operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company or of the Subsidiary which may have been made
or given by any other Purchaser or by any agent or employee of any other Purchaser, and no
Purchaser or any of its agents or employees shall have any liability to any other Purchaser (or any
other Person) relating to or arising from any such information, materials, statements or opinions.
Nothing contained herein or in any 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 Document. Each Purchaser acknowledges that no other Purchaser has
acted as agent for such Purchaser in connection with making its investment hereunder and that no
other Purchaser will be acting as agent of such Purchaser in connection with monitoring its
investment hereunder. 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.

[SIGNATURE
PAGES TO FOLLOW]

29

 

     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:
	 	/s/ James S. Burns	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:
	 	James S. Burns	 	 
	 

	 	Title:
	 	President & Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	 
	 
	 	 	9640 Medical Center Drive	 	 
	 	 	Rockville, MD 20850	 	 
	 	 	Facsimile No.: (240) 864-2624	 	 
	 	 	Telephone No.: (240) 864-2651	 	 
	 	 	Attn: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	       With a copy to:	 	Arnold & Porter LLP	 	 
	 	 	555 Twelfth Street, NW	 	 
	 	 	Washington, DC 20004	 	 
	 	 	Facsimile No.: (202) 942-5999	 	 
	 	 	Telephone No.: (202) 942-5124	 	 
	 	 	Attn: Richard E. Baltz, Esq.	 	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES FOR PURCHASERS FOLLOW]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this EntreMed Common Stock Purchase
Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.

	 	 	 	 	 	 
	 	 	LBI GROUP INC	 
	 
	 

	 	By:
	 	/s/ Hingge Hsu	 
	 	 	 	 	 	 
	 

	 	Name:
	 	Hingge Hsu	 
	 

	 	Title:
	 	 Managing Director	 
	 
	 	 	 	 	 
	 	 	Purchase Price: $3,999,998.31  	 
	 
	 	 	 	 	 
	 	 	Number of Shares to be acquired: 1,729,729  	 
	 
	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 864,865  	 
	 
	 	 	 	 	 
	 	 	Address for Notice: 399 Park Avenue  	 
	 

	 	 	 	                    New York, NY 10022 	 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.

	 	 	 	 	 	 
	 	 	CAPITAL VENTURES
INTERNATIONAL	 
	 
	 

	 	By:
	 	/s/ Martin Kobinger	 
	 	 	 	 	 
	 

	 	Name:
	 	Martin Kobinger	 
	 

	 	Title:
	 	Investment Manager	 
	 
	 	 	 	 	 
	 	 	Purchase Price: $1,999,998	 
	 
	 	 	 	 	 
	 	 	Number of Shares to be
acquired: 864,864	 
	 
	 	 	 	 	 
	 	 	Underlying Shares
subject to Warrant: 432,432	 
	 
	 	 	 	 	 
	 	 	Address for Notice: c/o Heights Capital Management	 
	 

	 	 	 	                     101 California Street, Suite 3250	 
	 

	 	 	 	                     San Francisco, CA 94111	 

 

 

	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.	 
	 
	 	 	 	 	 	 	 
	 	 	SDS CAPITAL GROUP SPC, LTD.	 
	 
	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Steve Derby	 
	 	 	 	 	 	 
	 	 	Name:	 	Steve Derby	 
	 	 	Title:	 	Director	 
	 
	 	 	 	 	 	 	 
	 	 	Purchase Price: $999,999	 
	 
	 	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 432,432	 
	 
	 	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 216,216	 
	 
	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	c/o SDS Management, LLC	 
	 

	 	 	 	 	 	Attn: Scott Derby	 
	 

	 	 	 	 	 	53 Forest Avenue, 2nd Floor	 
	 

	 	 	 	 	 	Old Greenwich, CT 06870	 

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	NITE CAPITAL LP
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Keith A. Goodman
	 	 	 	 	 
	 	 	Name:	 	Keith A. Goodman
	 	 	Title:	 	Manager of the General Partner
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $999,999
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 432,432
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 216,216
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	Nite Capital LP
	 

	 	 	 	 	 	100 East Cook Avenue, Suite 201
	 

	 	 	 	 	 	Libertyville, IL 60048

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	D3 LifeScience Select Ltd.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Nathan Fischel
	 	 	 	 	 
	 	 	Name:	 	Nathan Fischel, MD, CFA
	 	 	Title:	 	Managing Member
of the Investment Manager, D3 Capital Management, LLC on behalf of D3 LifeScience Select Ltd.
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $159,999.96
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 69,189
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 34,595
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	D3 LifeScience Select Ltd.
	 

	 	 	 	 	 	c/o D3 Capital Management, LLC
	 

	 	 	 	 	 	10990 Wilshire Blvd., Suite 1400
	 

	 	 	 	 	 	Los Angeles, CA 90024

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	D3 LifeScience Ltd.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Nathan Fischel
	 	 	 	 	 
	 	 	Name:	 	Nathan Fischel, MD, CFA
	 	 	Title:	 	Managing Member of the
Investment Manager, D3 Capital Management, LLC on behalf of D3 LifeScience Ltd.
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $140,001.06
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 60,541
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 30,270
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	D3 LifeScience Ltd.
	 

	 	 	 	 	 	c/o D3 Capital Management, LLC
	 

	 	 	 	 	 	10990 Wilshire Blvd., Suite 1400
	 

	 	 	 	 	 	Los Angeles, CA 90024

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	D3 LifeScience Market Neutral Ltd.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Nathan Fischel
	 	 	 	 	 
	 	 	Name:	 	Nathan Fischel, MD, CFA
	 	 	Title:	 	Managing Member of the
Investment Manager, D3 Capital Management, LLC on behalf of D3 LifeScience Market Neutral Ltd.
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $199,998.88
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 86,486
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 43,243
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	D3 LifeScience Market Neutral Ltd.
	 

	 	 	 	 	 	c/o D3 Capital Management, LLC
	 

	 	 	 	 	 	10990 Wilshire Blvd., Suite 1400
	 

	 	 	 	 	 	Los Angeles, CA 90024

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	XMARK OPPORTUNITY FUND LP
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Mitchell D. Kaye
	 	 	 	 	 
	 	 	Name:	 	Mitchell D. Kaye
	 	 	Title:	 	Chief Information Officer
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $1,097,975
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 474,800
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 237,400
	 
	 	 	Address for Notice:	 	301 Tresser Blvd.
	 

	 	 	 	 	 	Suite 1320
	 

	 	 	 	 	 	Stamford, CT 06901

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	XMARK OPPORTUNITY FUND LTD.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Mitchell D. Kaye
	 	 	 	 	 
	 	 	Name:	 	Mitchell D. Kaye
	 	 	Title:	 	Chief Information Officer
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $1,214,525
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 525,200
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 262,600
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	301 Tresser Blvd.
	 

	 	 	 	 	 	Suite 1320
	 

	 	 	 	 	 	Stamford, CT 06901

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	XMARK IV INVESTMENT PARTNERS LLC
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Mitchell D. Kaye
	 	 	 	 	 
	 	 	Name:	 	Mitchell D. Kaye
	 	 	Title:	 	Chief Information Officer
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $2,312,500
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 1,000,000
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 500,000
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	301 Tresser Blvd.
	 

	 	 	 	 	 	Suite 1320
	 

	 	 	 	 	 	Stamford, CT 06901

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	ABINGWORTH BIOEQUITIES MASTER FUND LTD.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ James Aisell
	 	 	 	 	 
	 	 	Name:	 	James Aisell
	 	 	Title:	 	Director
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $2,199,999.19
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 951,351
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 475,676
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	38 Jermyn Street
	 

	 	 	 	 	 	London
	 

	 	 	 	 	 	SW1Y 6DN
	 

	 	 	 	 	 	United Kingdom

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	ABINGWORTH BIOVENTURES IV LP
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ James Aisell
	 	 	 	 	 
	 	 	Name:	 	James Aisell
	 	 	Title:	 	Director
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $1,784,692.68
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 771,759
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 385,880
	 
	 	 	 	 	 	 
	 	 	Address for Notice: 38	 	Jermyn Street
	 

	 	 	 	 	 	London
	 

	 	 	 	 	 	SW1Y 6DN
	 

	 	 	 	 	 	United Kingdom

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	ABINGWORTH BIOVENTURES IV EXECUTIVES LP
	 
	 	 	By:	 	/s/ James Aisell
	 	 	 	 	 
	 	 	Name:	 	James Aisell
	 	 	Title:	 	Director
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $15,306.44
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 6,619
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 3,309
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	38 Jermyn Street
	 

	 	 	 	 	 	London
	 

	 	 	 	 	 	SW1Y 6DN
	 

	 	 	 	 	 	United Kingdom

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	CELGENE
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Stephen Jasko
	 	 	 	 	 
	 	 	Name:	 	Stephen Jasko
	 	 	Title:	 	Treasurer
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $1,999,998
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 864,864
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 432,432
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	86-90 Morris Avenue
	 

	 	 	 	 	 	Summit, NJ 07901

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	RAQ, LLC
	 
	 	 	By:	 	/s/ Lindsay A. Rosenwald
	 	 	 	 	 
	 	 	Name:	 	Lindsay A. Rosenwald, M.D.
	 	 	Title:	 	Managing Member
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $249,999.75
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 108,108
	 
	 	 	Underlying
Shares subject to Warrant: 54,054	 	
	 
	 	 	Address for
Notice:  787 Seventh Avenue	
	 

	 	 	  48th Floor
	 

	 	 	  New York, NY 10019

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	Valesco Healthcare Partners I LP
	 
	 	 	By:	 	/s/ Lindsay A. Rosenwald
	 	 	 	 	 
	 	 	Name:	 	Lindsay A. Rosenwald, M.D.
	 	 	Title:	 	Managing Member of Valesco Healthcare GP, LLC
	 	 	 	 	General Partner to Valesco Healthcare Partners I LP
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $55,000.50
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 23,784
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 11,892
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	787 Seventh Avenue
	 

	 	 	 	 	 	48th Floor
	 

	 	 	 	 	 	New York, NY 10019

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	Valesco Healthcare Partners II LP
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Lindsay A. Rosenwald
	 	 	 	 	 
	 	 	Name:	 	Lindsay A. Rosenwald, M.D.
	 	 	Title:	 	Managing Member of Valesco Healthcare GP, LLC
	 	 	 	 	General Partner to Valesco Healthcare Partners II LP
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $97,499.63
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 42,162
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 21,081
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	787 Seventh Avenue
	 

	 	 	 	 	 	48th Floor
	 

	 	 	 	 	 	New York, NY 10019

 

 

	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 
	 	 	Valesco Healthcare Overseas Fund, Ltd.
	 
	 	 	 	 	 	 
	 	 	By:	 	/s/ Lindsay A. Rosenwald
	 	 	 	 	 
	 	 	Name:	 	Lindsay A. Rosenwald, M.D.
	 	 	Title:	 	Managing Member of Valesco Healthcare GP, LLC
	 	 	 	 	General Partner to Valesco Capital Management LP
	 	 	 	 	Investment Manager to Valesco Healthcare Overseas Fund, Ltd.
	 
	 	 	 	 	 	 
	 	 	Purchase Price: $97,499.63
	 
	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 42,162
	 
	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 21,081
	 
	 	 	 	 	 	 
	 	 	Address for Notice:	 	787 Seventh Avenue
	 

	 	 	 	 	 	48th Floor
	 

	 	 	 	 	 	New York, NY 10019

 

 

	 	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 	 	 
	 	 	Fort Mason Master LP	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Dan German	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Dan German	 	 
	 	 	Title:	 	Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purchase Price: $1,878,198.63	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 812,194	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 406,097	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	456 Montgomery Street	 	 
	 

	 	 	 	 	 	22nd Floor	 	 
	 

	 	 	 	 	 	San Francisco, CA 94104	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 	 	 
	 	 	Fort Mason Partners LP	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Dan German	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Dan German	 	 
	 	 	Title:	 	Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purchase Price: $121,799.38	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 52,670	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 26,335	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	456 Montgomery Street	 	 
	 

	 	 	 	 	 	22nd Floor	 	 
	 

	 	 	 	 	 	San Francisco, CA 94104	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.
	 
	 	 	 	 	 	 	 	 
	 	 	Domain Public Equity Partners LP	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Nicole Vitollo	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Nicole Vitollo	 	 
	 	 	Title:	 	Managing Member	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purchase Price: $4,999,999.63	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 2,162,162	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 1,081,081	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	One Palmer Square	 	 
	 

	 	 	 	 	 	Suite 515	 	 
	 

	 	 	 	 	 	Princeton, NJ 08542	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PIERCE DIVERSIFIED STRATEGY MASTER FUND LLC	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Sherrill Lybrook	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Sherrill Lybrook	 	 
	 	 	Title:	 	Principal	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purchase Price: $299,998.31	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Number of Shares to be
acquired: 129,729	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Underlying Shares
subject to Warrant: 64,864	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	One Ferry Building Suite 255	 	 
	 

	 	 	 	 	 	San Francisco, CA 94111	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ENABLE OPPORTUNITY PARTNERS LP	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Sherrill Lybrook	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Sherrill Lybrook	 	 
	 	 	Title:	 	Principal	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purchase Price: $240,000.51	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Number of Shares to be acquired:103,784	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant:51,892	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	One Ferry Building Suite 255	 	 
	 

	 	 	 	 	 	San Francisco, CA 94111	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the
parties hereto have caused this EntreMed Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	ENABLE GROWTH PARTNERS LP	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Sherrill Lybrook	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Sherrill Lybrook	 	 
	 	 	Title:	 	Principal	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purchase Price: $1,459,999.19	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 631,351	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 315,676	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	One Ferry Building Suite 255	 	 
	 

	 	 	 	 	 	San Francisco, CA 94111	 	 

 

 

	 	 	 	 	 	 	 	 	 
	 	 	IN WITNESS WHEREOF, the parties hereto have caused this EntreMed
Common Stock Purchase Agreement to be duly executed by their
respective authorized signatories as of the date first indicated
above.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	SMITHFIELD FIDUCIARY LLC	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Adam J. Chill	 	 
	 	 	 	 	 	 	 
	 	 	Name:	 	Adam J. Chill	 	 
	 	 	Title:	 	Authorized Signatory	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Purchase Price: $1,374,998.63	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Number of Shares to be acquired: 594,594	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Underlying Shares subject to Warrant: 297,297	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Address for Notice:	 	c/o Highbridge Capital Management, LLC	 	 
	 

	 	 	 	 	 	9 West 57th Street, 27th Floor	 	 
	 

	 	 	 	 	 	New York, NY 10019	 	 
	 

	 	 	 	 	 	Attn: Ari J. Storch/Adam J. Chill	 	 

 

 

	 	 	 
	EXHIBITS:
	 	 
	 
	 	 
	A

	Form of Warrant
	 
	 	 
	B

	Purchaser Questionnaire
	 
	 	 
	C

	Form of Opinion
	 
	 	 
	D

	Instruction Sheet
	 
	 	 
	E

	Plan of Distribution
	 
	 	 
	F

	Transfer Agent Instruction

	 	 	 
	SCHEDULES:
	 
	 	 
	3.1(a)

	Subsidiaries
	 
	 	 
	3.1(e)

	Preemptive Rights
	 
	 	 
	3.1(f)

	Capitalization
	 
	 	 
	3.1(h)

	Material Changes
	 
	 	 
	3.1(n)

	Registration Rights
	 
	 	 
	6.1(f)

	Company Registration Statement

 

 

EXHIBIT A

FORM OF WARRANT

 

 

EXHIBIT B

PURCHASER QUESTIONNAIRE

INSTRUCTION SHEET FOR PURCHASER

(to be read in conjunction with the entire Securities Purchase Agreement)

	A.	 	Complete the following items in the Securities Purchase Agreement:

	 	1.	 	Provide the information regarding the Purchaser requested on the signature
page. The Securities Purchase Agreement must be executed by an individual authorized to
bind the Purchaser.
	 
	 	2.	 	Exhibit B-1 – Stock Certificate Questionnaire:
	 
	 	 	 	Provide the information requested by the Stock Certificate Questionnaire.
	 
	 	3.	 	Exhibit B-2 – Registration Statement Questionnaire:
	 
	 	 	 	Provide the information requested by the Registration Statement Questionnaire.
	 
	 	4.	 	Exhibit B-3 – Purchaser Certificate:
	 
	 	 	 	Provide the information requested by the Certificate for Individual Purchasers or
the Certificate for Corporate, Partnership, Trust, Foundation and Joint Purchasers,
as applicable.
	 
	 	5.	 	Return the signed Securities Purchase Agreement to:

Dane R. Saglio

Chief Financial Officer

EntreMed, Inc.

9640 Medical Center Drive

Rockville, MD 20850

Facsimile: (301) 315-2437

	 	B.	 	Instructions regarding the transfer of funds for the purchase of Securities
will be telecopied to the Purchaser at a later date.
	 
	 	C.	 	Upon the resale of the Registrable Shares by the Purchaser after the
Registration Statement covering the Registrable Shares is effective, as described in
the Securities Purchase Agreement, the Purchaser must confirm that a current prospectus
is deemed to be delivered to such buyer in accordance with Rule 172.

 

 

EXHIBIT B-1

ENTREMED, INC.

STOCK CERTIFICATE QUESTIONNAIRE

Pursuant to Section 2.2(b) of the Agreement, please provide us with the following
information:

	1.	 	The exact name that the Securities are to be registered in (this is
the name that will appear on the stock certificate(s)). You may use a
nominee name if appropriate:
	 
	2.	 	The relationship between the Purchaser of the Securities and the
Registered Holder listed in response to item 1 above:
	 
	3.	 	The mailing address of the Registered Holder listed in response to
item 1 above:
	 
	4.	 	The Tax Identification Number of the Registered Holder listed in
response to item 1 above:

 

 

EXHIBIT B-2

ENTREMED, INC.

REGISTRATION STATEMENT QUESTIONNAIRE

In connection with the preparation of the Registration Statement, please provide us with the
following information regarding the Purchaser.

A.     GENERAL INFORMATION

1.      Please state your organization’s name exactly as it should appear in the Registration Statement:

2.      Have you or your organization had any position, office or other material relationship within the
past three years with the Company or its Affiliates other than as disclosed in the Prospectus
included in the Registration Statement?

o Yes o No

          If yes, please indicate the nature of any such relationships below:

B.     SECURITIES HOLDINGS

        Please fill in all blanks in the following questions related to your beneficial ownership of
the Company’s capital stock. Generally, the term “beneficial ownership” refers to any direct or
indirect interest in the securities which entitles you to any of the rights or benefits of
ownership, even though you may not be the holder of record of the securities. For example,
securities held in “street name” over which you exercise voting or investment power would be
considered beneficially owned by you. Other examples of indirect ownership include ownership by a
partnership in which you are a partner or by an estate or trust of which you or any member of your
immediate family is a beneficiary. Ownership of securities held in the names of your spouse, minor
children or other relatives who live in the same household may be attributed to you.

PLEASE NOTE: IF YOU HAVE ANY REASON TO BELIEVE THAT ANY INTEREST IN SECURITIES OF THE COMPANY WHICH
YOU MAY HAVE, HOWEVER REMOTE, IS A BENEFICIAL INTEREST, PLEASE DESCRIBE SUCH INTEREST. FOR
PURPOSES OF RESPONDING TO THIS QUESTIONNAIRE, IT IS PREFERABLE TO ERR ON THE SIDE OF INCLUSION
RATHER THAN EXCLUSION. WHERE THE SEC’S INTERPRETATION OF BENEFICIAL OWNERSHIP WOULD REQUIRE
DISCLOSURE OF YOUR INTEREST OR POSSIBLE INTEREST IN CERTAIN SECURITIES OF THE COMPANY, AND YOU
BELIEVE THAT YOU DO NOT ACTUALLY POSSESS THE ATTRIBUTES OF BENEFICIAL OWNERSHIP, AN APPROPRIATE
RESPONSE IS TO DISCLOSE THE INTEREST AND AT THE SAME TIME DISCLAIM BENEFICIAL OWNERSHIP OF THE
SECURITIES.

1.     As of February ___, 2006, I owned outright (including shares registered in my name individually
or jointly with others, shares held in the name of a bank, broker, nominee,

 

 

depository or in “street name” for my account), the following number of shares of the Company’s
capital stock: .

2.     In addition to the number of shares I own outright as indicated by my answer to question B(1),
as of February 2, 2006, I had or shared voting power or investment power, directly or indirectly,
through a contract, arrangement, understanding, relationship or otherwise, over the following
number of shares of the Company’s capital stock: .

If the answer to this question B(2) was not “zero,” please complete the following: with whom
shared; and the nature of the relationship and any underlying voting trust agreement, investment
arrangement or the like:

SHARED VOTING POWER:

	 	 	 	 	 
	 

	 	With Whom
	 	Nature of
	Number of Shares

	 	Shared
	 	Relationship

SHARED INVESTMENT POWER:

	 	 	 	 	 
	 

	 	With Whom
	 	Nature of
	Number of Shares

	 	Shared
	 	Relationship

3.     As of February 2, 2006, , I will have the right to acquire            shares of the
Company’s capital stock pursuant to outstanding stock options issued under the Company’s stock
option plans and            shares pursuant to the exercise of outstanding warrants (none,
indicated by “0” above).

	 	 	 
	Options and Warrants
	 	 
	Class

	 	Number of Shares

4.     Please identify the natural person or persons who have voting and/or investment control over the
Company’s securities that you own, and state whether such person(s) disclaims beneficial ownership
of the securities. For example, if you are a general partnership, please identify the general
partners in the partnership.

 

 

C. NASD Questions

       (3) The NASD defines a “person associated with a member” or an “associated
person of a member” as being every sole proprietor, partner, equity owner, officer,
director or branch manager of any member, or any natural person occupying a similar
status or performing similar functions, or any natural person engaged in the
investment banking or securities business who directly or indirectly controls or is
controlled by such member (for example, any employee), whether or not any such
person is registered or exempt from registration with the NASD.

(4) Immediate family includes parents, mother-in-law, father-in-law, husband or wife, brother or
sister, brother-in-law or sister-in-law, son-in-law or daughter-in-law, and children, or any other
person who is supported, directly or indirectly, to a material extent, by a person associated with
a member of the NASD or any other broker/dealer.

1. Are you (i) a “member”(1) of the National Association of Securities Dealers, Inc. (the “NASD”),
(ii) an “affiliate”(2) of a member of the NASD, (iii) a “person associated with a member” or an
“associated person of a member”(3) of the NASD or (iv) an immediate family member(4) of any of the
foregoing persons? If yes, please identify the member and describe such relationship (whether
direct or indirect), and please respond to Question Number 2 below; if no, please proceed directly
to Question Number 3.

Yes o                      No o

Description:

(1) NASD defines a “member” as any broker or dealer admitted to membership in the NASD, or any
officer or partner or branch manager of such a member, or any person occupying a similar status or
performing a similar function for such a member.

(2) The term “affiliate” means a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is in common control with, the person specified.
Persons who have acted or are acting on behalf of or for the benefit of a person include, but are
not necessarily limited to, directors, officers, employees, agents, consultants and sales
representatives. The following should apply for purposes of the foregoing:

     (i) a person should be presumed to control a Member if the person beneficially owns 10 percent
or more the outstanding voting securities of a Member which is a corporation, or beneficially owns
a partnership interest in 10 percent or more of the distributable profits or losses of a Member
which is a partnership;

     (ii) a Member should be presumed to control a person if the Member and Persons
Associated With a Member beneficially own 10 percent or more of the outstanding voting securities
of a person which is a corporation, or beneficially own a partnership interest in 10 percent or
more of the distributable profits or losses of a person which is a partnership;

     (iii) a person should be presumed to be under common control with a Member if:

      (1) the same person controls both the Member and another person by beneficially
owning 10 percent or more of the outstanding voting securities of a Member or person
which is a corporation, or by beneficially owning a partnership

 

 

interest in 10 percent or more of the distributable profits or losses of a
Member or person which is a partnership; or

      (2) a person having the power to direct or cause the direction of the
management or policies of the Member or such person also has the power to direct or
cause the direction of the management or policies of the other entity in question.

      (3) The NASD defines a “person associated with a member” or an “associated
person of a member” as being every sole proprietor, partner, equity owner, officer,
director or branch manager of any member, or any natural person occupying a similar
status or performing similar functions, or any natural person engaged in the
investment banking or securities business who directly or indirectly controls or is
controlled by such member (for example, any employee), whether or not any such
person is registered or exempt from registration with the NASD.

      (4) Immediate family includes parents, mother-in-law, father-in-law, husband or
wife, brother or sister, brother-in-law or sister-in-law, son-in-law or
daughter-in-law, and children, or any other person who is supported, directly or
indirectly, to a material extent, by a person associated with a member of the NASD
or any other broker/dealer.

2. If you answered “yes” to Question Number 1, please furnish any information as to whether any
such member intends to participate in any capacity in the public offering, including the details of
such participation:

Description:

          3. Are you or have you been an “underwriter or related person”(5) or a person associated with
an underwriter or related person, including, without limitation, with respect to the proposed
public offering? If yes, please identify the underwriter or related person and describe such
relationship (whether direct or indirect).

Yes o                      No o

Description:

          4. If known, please describe in detail any underwriting compensations, arrangements or
dealings entered into during the previous twelve months, or proposed to be consummated in the next
twelve months, between (i) any underwriter or related person, member of the NASD, affiliate of a
member of the NASD, person associated with a member or associated person of a member of the NASD or
any immediate family member thereof, on the one hand, and (ii) the Company, or any director,
officer or stockholder thereof, on the other hand, which provides for the receipt of any item of
value and/or the transfer of any warrants, options or other securities from the Company to any such
person (other than the information relating to the arrangements with any investment firm or
underwriting organization which may participate in the proposed public offering).

Description:

 

 

5. Have you purchased the securities in the ordinary course of business?

Yes o                      No o

 

			
	(5)	 	The term “underwriter or related person” includes underwriters, underwriters’ counsel,
financial consultants and advisors, finders, members of the selling or distribution group, and any
and all other persons associated with or related to any of such persons, including members of the
immediate family of such persons.
	 
	 	 	The answers to the foregoing questions are correctly stated to the best of my information and
belief. I shall advise Dane R. Saglio, (240) 864-2651 promptly of any changes in the foregoing
information prior to the effectiveness of the Registration Statement.

	 	 	 
	 

	 	(Print name of Selling Security Holder)
	 
	 	 
	 

	 	(Signature)
	 
	 	 
	 

	 	By:
	 

	 	(Name and title of signatory, if
	 

	 	stockholder is an entity)
	 
	 	 
	 

	 	(Date)

 

 

EXHIBIT B-3

ENTREMED, INC.

CERTIFICATE FOR INDIVIDUAL PURCHASERS

If the investor is an individual Purchaser (or married couple) the Purchaser must complete, date
and sign this Certificate.

CERTIFICATE

I certify that the representations and responses below are true and accurate:

In order for the Company to offer and sell the Securities in conformance with state and federal
securities laws, the following information must be obtained regarding your investor status. Please
initial each category applicable to you as an investor in the Company.

o      (1)      A natural person whose net worth(1), either individually or jointly with such person’s spouse
exceeds $1,000,000;

o      (2)      A natural person who had an income(2) in excess of $200,000, or joint income with the
person’s spouse in excess of $300,000, in 2004 and 2005, and reasonably expects to have individual
income reaching the same level in 2006;

o      (3)       An executive officer or director of the Company.

Date:

	 	 	 
	 

	 	Name(s) of Purchaser
	 
	 	 
	 

	 	Signature
	 
	 	 
	 

	 	Signature

 

			
	(1)	 	For purposes of this Certificate, “net worth” means the excess of total assets at fair market
value over total liabilities, except that the principal residence owned by a natural person shall
be valued either (a) at cost, including the cost of improvements, net of current encumbrances upon
the property, or (b) at the appraised value of the residence as determined upon a written appraisal
used by an institutional lender making a loan to the individual secured by the property, including
the cost of subsequent improvements, net of current encumbrances upon the property. As used in the
preceding sentence, “institutional lender” means a bank, savings and loan company, industrial loan
company, credit union or personal property broker or a company whose principal business is as a
lender of loans secured by real property and which has such loans receivable in the amount of
$2,000,000 or more.

 

 

			
	(2)	 	For purposes of this Certificate, “income” means adjusted gross income, as reported for federal
income tax purposes, increased by the following amounts: (a) the amount of any tax exempt interest
income received, (b) the amount of losses claimed as a limited partner in a limited partnership,
(c) any deduction claimed for depletion, (d) amounts contributed to an IRA or Keogh retirement
plan, (e) alimony paid, and (f) any amounts by which income from long-term capital gains has been
reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the
Internal Revenue Code.

 

 

EXHIBIT B-3

ENTREMED, INC.

CERTIFICATE FOR CORPORATE, PARTNERSHIP,

TRUST, FOUNDATION, AND JOINT PURCHASERS

If the investor is a corporation, partnership, trust, pension plan, foundation, joint purchaser
(other than a married couple) or other entity, an authorized officer, partner, or trustee must
complete, date and sign this Certificate.

CERTIFICATE

The undersigned certifies that the representations and responses below are true and accurate:

(a) The investor has been duly formed and is validly existing and has full power and authority to
invest in the Company. The person signing on behalf of the undersigned has the authority to execute
and deliver the Securities Purchase Agreement on behalf of the Purchaser and to take other actions
with respect thereto.

(b) Indicate the form of entity of the undersigned:

	 	o	 	Limited Partnership
	 
	 	o	 	General Partnership
	 
	 	o	 	Corporation
	 
	 	o	 	Revocable Trust (identify each grantor and indicate under what circumstances
the trust is revocable by the grantor:
	 
	 	 	 	(Continue on a separate piece of paper, if necessary.)
	 
	 	o	 	Other Type of Trust (indicate type of trust and, for trusts other than
pension trusts, name the grantors and beneficiaries:
	 	 	 	(Continue on a separate piece of paper, if necessary.)
	 
	 	o	 	Other form of organization (indicate form of organization ( ).

(c) Indicate the approximate date the undersigned entity was formed:

(d) In order for the Company to offer and sell the Securities in conformance with state and federal
securities laws, the following information must be obtained regarding your investor status. Please
initial each category applicable to you as an investor in the Company.

           o      (1)      A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in Section 3(a)(5)(A)
of the Securities Act whether acting in its individual or fiduciary capacity;

           o      (2)      A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934;

           o      (3)      An insurance company as defined in Section 2(13) of the Securities Act;

 

 

           o      (4)      An investment company registered under the Investment Company Act of 1940
or a business development company as defined in Section 2(a)(48) of that Act;

           o      (5)      A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act of
1958;

           o      (6)      A plan established and maintained by a state, its political subdivisions,
or any agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;

           o      (7)      An employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan fiduciary,
as defined in Section 3(21) of such act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the employee
benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan,
with investment decisions made solely by persons that are accredited investors;

           o      (8)      A private business development company as defined in Section 202(a)(22)
of the Investment Advisers Act of 1940;

           o      (9)      An organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Securities, with total assets in
excess of $5,000,000;

           o      (10)      A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities, whose purchase is directed by a
sophisticated person who has such knowledge and experience in financial and business
matters that such person is capable of evaluating the merits and risks of investing
in the Company;

           o      (11)      An entity in which all of the equity owners qualify under any of the
above subparagraphs. If the undersigned belongs to this investor category only, list
the equity owners of the undersigned, and the investor category which each such
equity owner satisfies:

 

 

(Continue on a separate piece of paper, if necessary.)

	 
	Dated:

	 

	Name of investor

	 

	Signature and title of authorized

	officer, partner or trustee

 

 

EXHIBIT C

FORM OF OPINION

 

 

EXHIBIT D

ENTREMED, INC.

INSTRUCTION SHEET

IMPORTANT — DO NOT REMOVE THIS INSTRUCTION SHEET FROM THE ATTACHED SHARE CERTIFICATE UNLESS AND
UNTIL THE SHARES ARE SOLD AS FOLLOWS:

(1) THE
SHARES ARE RESOLD PURSUANT TO THE REGISTRATION STATEMENT ON FORM S-3
(NO. [  ]), AND, IN CONNECTION WITH SUCH RESALE, THE HOLDER HAS PROVIDED TO THE COMPANY OR TO
THE TRANSFER AGENT FOR THE COMPANY’S STOCK A PURCHASER’S CERTIFICATE OF SUBSEQUENT SALE AND THE
HOLDER HAS DELIVERED A CURRENT PROSPECTUS, OR, THE HOLDER HAS CONFIRMED THAT A CURRENT PROSPECTUS
IS DEEMED TO BE DELIVERED IN CONNECTION WITH SUCH RESALE IN ACCORDANCE WITH RULE 172 UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR

(2) THE SHARES ARE RESOLD IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED, PROVIDED THAT, PRIOR TO SUCH RESALE, THE HOLDER HAS NOTIFIED
THE COMPANY OF SUCH DISPOSITION AND PROVIDED THE COMPANY WITH WRITTEN ASSURANCES, IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY OF COMPLIANCE WITH THE REQUIREMENTS OF SUCH EXEMPTION.

DO NOT REMOVE THIS INSTRUCTION SHEET FROM

THE ATTACHED SHARE CERTIFICATE

EXCEPT IN ACCORDANCE WITH

THE INSTRUCTIONS SET FORTH ABOVE.

 

 

EXHIBIT E

PLAN OF DISTRIBUTION

 

 

EXHIBIT F

TRANSFER AGENT INSTRUCTIONS

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