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Investor And Registration Rights Agreement

This is an actual contract by Celgene.

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Sectors: Biotechnology / Pharmaceuticals
Governing Law: New York, View New York State Laws
Effective Date: December 31, 2002
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EXECUTION COPY


INVESTOR AND REGISTRATION RIGHTS AGREEMENT


This INVESTOR AND REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and effective as of December 31, 2002 by and between EntreMed, Inc., a Delaware corporation (the "Company"), and Celgene Corporation, a Delaware corporation (the "Holder").


RECITALS:


A. Concurrently with the execution of this Agreement, the Holder is agreeing to acquire from the Company shares of the Company's Preferred Stock and a Warrant to purchase shares of Common Stock pursuant to the Securities Purchase Agreement, of even date herewith (the "Securities Purchase Agreement"); and


B. By entering into this Agreement, the Company wishes to provide a further inducement to the Holder to enter into the Securities Purchase Agreement and purchase the securities thereunder.


NOW, THEREFORE, in consideration of the foregoing, the parties agree as follows:


1. Definitions. For purposes of this Agreement:


(a) "Common Stock" means shares of common stock, par value $0.01, of the Company.


(b) "Exchange Act" means the Securities Exchange Act of 1934, as amended.


(c) "Form S-3" means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.


(d) "Holder" means any Person owning or having the right to acquire Registrable Securities, or any assignee thereof in accordance with Section 11 hereof.


(e) "Person" means any individual, partnership, limited liability company, joint venture, corporation, association, trust or any other entity or organization.


(f) "Preferred Stock" means shares of the Series A Convertible Preferred Stock, par value $1.00, of the Company.


(g) "Register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.


(h) "Registrable Securities" means (1) any Common Stock owned by the Holder, (2) any Common Stock directly or indirectly issuable or issued upon exercise of the Warrant or conversion of any Preferred Stock, and (3) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, or upon exercise or conversion of, such Warrant or Preferred Stock or such warrants, rights or securities; provided, however, that any Registrable Securities sold by the Holder in a transaction in which the Holder's rights under this Agreement are not assigned pursuant to Section 11 below shall cease to be Registrable Securities from and after the time of such sale.


(i) "SEC" means the Securities and Exchange Commission.


(j) "Securities Act" means the Securities Act of 1933, as amended.


(k) "Violation" means any of the following statements, omissions or violations: (i) any untrue statement or alleged untrue statement of a material fact contained in a registration statement filed under or referred to in this Agreement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto or any documents filed under state securities or "blue sky" laws in connection therewith, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law arising from, relating to or in connection with the offer and sale of Registrable Securities pursuant to this Agreement.


(l) "Warrant" means the warrant to purchase an aggregate of Six Million (6,000,000) shares of Common Stock dated as of the date hereof, as amended from time to time.


2. Request for Registration.


(a) If at any time the Registration Statement (as defined in the Purchase Agreement) is not effective, the Company shall receive a written request from the Holder that the Company file a registration statement under the Securities Act, then the Company shall, subject to the limitations of Section 2(b) below, file (as expeditiously as practicable, and in any event within sixty (60) days of the receipt of such request) and use its best efforts to have declared effective as thereafter as is practicable, a registration statement under the Securities Act with respect to all Registrable Securities which the Holder requests to be registered.


(b) Subject to Section 2(d) below, if the Holder intends to distribute the Registrable Securities covered by its request pursuant to Section 2(a) hereof by means of an underwriting, it shall so advise the Company as a part of its request made pursuant to this Section 2. The Holder shall select the managing underwriter or underwriters in such underwriting, such underwriter(s) to be reasonably acceptable to the Company. The Holder shall (together with the Company as provided in Section 4(f)) enter into an underwriting agreement in customary form with the underwriter or underwriters so selected for such


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underwriting by the Holder; provided, however, that the Holder (or any of its Permitted Transferees) shall not be required to make any representations, warranties or indemnities except as they relate to the Holder's ownership of shares and authority to enter into the underwriting agreement and to the Holder's intended method of distribution, and the liability of the Holder shall be limited to an amount equal to the net proceeds from the offering received by the Holder.


(c) The Company shall be obligated to effect only two (2) registrations pursuant to this Section 2 (an offering which is not consummated shall not be counted for this purpose); provided, however, that the Company shall be obligated to effect as many registrations (but not more than three (3) per year) as may be requested by the Holder in the event and so long as registration pursuant to Form S-3 or any similar "short-form" registration statement is available.


(d) Notwithstanding the foregoing, if the Company shall furnish to the Holder a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such registration statement to be filed by reason of a material pending transaction and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Holder; provided, however, that the Company may not utilize this right more than once in any twelve (12) month period.


3. Company Registration. If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holder) any of its stock or other securities under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration on Form S-8 (or similar or successor form) relating solely to the sale of securities to participants in a Company stock plan or to other compensatory arrangements to the extent includable on Form S-8 (or similar or successor form), or a registration on Form S-4 (or similar or successor form)), the Company shall, at such time, promptly give the Holder written notice of such registration. Upon the written request of the Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 19, the Company shall, subject to the provisions of Section 8, use its best efforts to cause to be registered under the Securities Act all of the Registrable Securities that the Holder has requested to be registered. The Company shall have no obligation under this Section 3 to make any offering of its securities, or to complete an offering of its securities that it proposes to make.


4. Obligations of the Company. Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:


(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective, and, upon the request of the Holder, keep such registration statement effective for up to one hundred eighty (180) days or until the Holder has completed the distribution referred to in such registration statement, whichever occurs first (but in any event for at least any period required under the Securities Act); provided that before filing such registration statement or any amendments thereto, the Company will furnish to the Holder copies of all such documents proposed to be filed.


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(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement.


(c) Furnish to the Holder such number of copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents as the Holder may reasonably request in order to facilitate the disposition of Registrable Securities owned by it.


(d) Use its best efforts to register and qualify the securities covered by such registration statement for offer and sale under such other securities or "blue sky" laws of such states or jurisdictions as shall be reasonably requested by the Holder, provided that the Company shall not be required in connection therewith or as a condition thereto (i) to qualify to do business in any state or jurisdiction where it would not otherwise be required to qualify but for the requirements of this clause (d), or (ii) to file a general consent to service of process in any such state or jurisdiction.


(e) Use diligent efforts to cause all Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the Company's business or operations to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities.


(f) In the event of any underwritten public offering, cooperate with the managing underwriter in such customary marketing activities (including, without limitation, any "roadshow") that the managing underwriter may request, and enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering.


(g) Notify the Holder at any time when a prospectus relating to such registration statement is required to be delivered under the Securities Act of the happening of any event of which it has knowledge as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.


(h) Notify the Holder and the Holder's underwriters, if any, and confirm such advice in writing: (i) when the registration statement has become effective, (ii) when any post-effective amendment to the registration statement becomes effective and (iii) of any request by the SEC for any amendment or supplement to the registration statement or prospectus or for additional information.


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(i) Notify the Holder if at any time the SEC should institute or threaten to institute any proceedings for the purpose of issuing, or should issue, a stop order suspending the effectiveness of the Registration Statement. Upon the occurrence of any of the events mentioned in the preceding sentence, the Company will use its best efforts to prevent the issuance of any such stop order or to obtain the withdrawal thereof as soon as possible. The Company will promptly advise the Holder of any order or communication of any public board or body addressed to the Company suspending or threatenin
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