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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1) *
NEXELL THERAPEUTICS INC.
(Formerly Known as VIMRx Pharmaceuticals Inc.)
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(Name of Issuer)
COMMON SHARES, $0.001 PAR VALUE PER SHARE
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(Title of Class of Securities)
65332H104
(Previous CUSIP Number: 927186106)
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(CUSIP Number)
Jan Stern Reed
BAXTER INTERNATIONAL INC.
One Baxter Parkway
Deerfield, Illinois 60015
847.948.2212
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 28, 1999
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [X].
NOTE: Schedules filed in paper format should include a signed original and five
(5) copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following page(s))
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CUSIP No. 65332H104 (Previous CUSIP NO.: 927186106)
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1) NAMES OF REPORTING PERSONS.
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
BAXTER INTERNATIONAL INC.
I.R.S. Identification Number: 36-0781620
BAXTER HEALTHCARE CORPORATION
I.R.S. Identification Number: 36-2604143
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [_]
(b) [_]
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3) SEC Use Only
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4) Source of Funds (See Instructions)
WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [_]
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6) Citizenship or Place of Organization
DELAWARE
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(7) Sole Voting Power
-0-
NUMBER OF
SHARES -----------------------------------------------------------
(8) Shared Voting Power
BENEFICIALLY 14,000,000
OWNED BY
-----------------------------------------------------------
EACH (9) Sole Dispositive Power
-0-
REPORTING
PERSON -----------------------------------------------------------
(10) Shared Dispositive Power
WITH 14,000,000
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person
44,757,091 (Includes the right to acquire 5,200,000 shares of Common Stock
pursuant to the Warrant (as defined herein) and the right to acquire
25,557,091 shares of Common Stock pursuant to the shares of Series A
Preferred Stock described herein)
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(12) Check box if the Aggregate Amount in Row (9) Excludes Certain Shares
(See Instructions)
[_]
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(13) Percent of Class Represented by Amount in Row (11)
47.05% (Assumes the exercise of the Warrant and the conversion of the
shares of Series A Preferred Stock, neither of which have occurred)
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(14) Type of Reporting Person (See Instructions)
CO
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Page 2 of 7 Pages
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CUSIP No. 65332H104 (Previous CUSIP NO.: 927186106)
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This Schedule 13D relates to the holdings of Baxter Healthcare Corporation, a
Delaware corporation ("Purchaser"), of 14,000,000 shares (the "Shares") of
common stock, $0.001 par value per share ("Common Stock"), of Nexell
Therapeutics Inc. (formerly known as VIMRx Pharmaceuticals Inc.) (the
"Company"); a Warrant to purchase 5,200,000 shares of Common Stock; and 70,282
shares of Series A Preferred Stock presently convertible into 25,557,091 shares
of Common Stock.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock of the Company. The address of the
principal executive offices of the Company is:
2571 Centerville Road
Suite 210
Little Falls II
Wilmington, Delaware 19808
Telephone: 302.998.1734
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Purchaser and Baxter International Inc., a
Delaware corporation and the owner of 100% of the capital stock of Purchaser
(the "Parent"). The principal executive offices of Purchaser and Parent are:
One Baxter Parkway
Deerfield, Illinois 60015
Telephone: 847.948.2000
Purchaser and Parent, through its subsidiaries, are engaged in the worldwide
development, distribution and manufacture of a diversified line of products,
systems and services used primarily in the health care field.
Neither Parent nor Purchaser, nor, to the best of the knowledge of Parent and
Purchaser, any director or executive officer of Parent or Purchaser, has been,
during the last five years, (a) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (b) a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As described in Item 4 below, in consideration of the Purchaser's tender of
common stock, warrants and debentures of Issuer's subsidiary to the Issuer,
Purchaser received from Issuer 3,000,000 shares of Common Stock, a warrant to
purchase 5,200,000 shares of Common Stock, and certain debentures of the Issuer.
Page 3 of 7 Pages
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CUSIP No. 65332H104 (Previous CUSIP NO.: 927186106)
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ITEM 4. PURPOSE OF TRANSACTION.
Prior to this transaction, the Company owned 80.5% of Nexell of California, Inc.
(formerly known as Nexell Therapeutics Inc.) ("Sub"), the Company's principal
business unit, which it acquired through the acquisition of certain assets from
Purchaser in December 1997 in exchange for (1) 11,000,000 shares of Common
Stock, (2) 66,304 shares of Series A Convertible Preferred Stock of the Company
with a liquidation value of $1,000 per share ("Series A Preferred Stock"), (3)
19.5 % of Sub's outstanding common stock, (4) a warrant to purchase an
additional 6% of Sub's common stock for $6,000,000, and (5) the right of
Purchaser to receive payments from Sub upon the occurrence of certain milestone
events, which could aggregate $21,000,000 if all the milestones were achieved.
In addition, for $30,000,000 paid to Sub, Purchaser received $30,000,000
principal amount of Sub's 6 1/2% convertible subordinated debentures convertible
into Sub's common stock upon a public offering of common stock by Sub.
The acquisition by the Company of Purchaser's interests in Sub, other than its
right to milestone payments, was effected through an exchange of Purchaser's
interests in Sub for an equivalent value of interests directly in the Company
(the "Acquisition"). The Company and Purchaser agreed to exchange Purchaser's
interests in Sub (common stock, warrant and convertible subordinated debentures,
but excluding its right to milestone payments ) for:
. 3,000,000 shares of Common Stock;
. an adjustment of the conversion price of the 70,282 outstanding shares of
Series A Preferred Stock owned by Purchaser from $5.50 per share to $2.75 per
share (the 3,978 share increase from the 66,304 shares originally issued are
a result of dividends payable in kind);
. a warrant to purchase 5,200,000 shares of Common Stock at a price of $1.15
per share (the "Warrant"); and
. $32,884,537.50 principal amount of 6 1/2% Convertible Subordinated Debentures
(replacing the $30,000,000 principal amount of Sub's 6 1/2% convertible
subordinated debentures plus accrued interest through the closing date of the
Acquisition) convertible, commencing November 30, 2002, into Common Stock at
a conversion price equal to 95% of the average of the closing prices of the
Common Stock on the Nasdaq National Market for the 30 consecutive trading
days preceding the date of conversion.
Other than as described herein in Items 4 and 6, neither Purchaser nor Parent
presently has any plans or proposals which relate to, or may result in, any of
the matters listed in Items 4(a) - 4(j) of Schedule 13D, although each reserves
the right to develop such plans.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Except as set forth herein, neither Purchaser, Parent, nor, to the best of the
knowledge of Purchaser and Parent, any director or executive officer of
Purchaser or Parent beneficially owns any other shares of Common Stock of the
Company.
(a) Purchaser and Parent beneficially own an aggregate of 14,000,000
shares of Common Stock, which constitute approximately 19.29% of the
total number of presently outstanding shares of Common Stock.
Purchaser and Parent also each beneficially own the right to acquire
up to 5,200,000 more shares of Common Stock pursuant to
Page 4 of 7 Pages
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CUSIP No. 65332H104 (Previous CUSIP NO.: 927186106)
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the Warrant. In addition, Purchaser and Parent each beneficially own
70,282 shares of Series A Preferred Stock, convertible after June 17,
1999 into 25,557,091 shares of Common Stock. Assuming the exercise of
the Warrant and the conversion of the shares of Series A Preferred
Stock, Purchaser and Parent would each beneficially own 44,757,091
shares of Common Stock, which would constitute approximately 47.05% of
the outstanding shares of Common Stock.
(b) Purchaser and Parent share the power to vote and dispose of the
Shares.
(c) As described in Item 4 above, pursuant to the Acquisition, Purchaser
and Parent acquired 3,000,000 shares of Common Stock and the Warrant
on May 28, 1998.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS OR ARRANGEMENTS WITH RESPECT TO ISSUER SECURITIES.
In addition to the agreement documenting the Acquisition described in Item 4
above, Purchaser has entered into the following contracts or arrangements with
the Company with respect to the Company's securities:
The Series A Preferred Stock
- ----------------------------
Purchaser holds 70,282 shares of Series A Preferred Stock, which are convertible
after June 17, 1999 at the option of the Purchaser. The shares will
automatically convert into Common Stock on December 17, 2004 or upon other
specified events, if not otherwise already converted. The conversion price at
which shares of Common Stock will be deliverable upon conversion without the
payment of additional consideration by Purchaser is $2.75 per share, subject to
adjustment for stock splits and combinations, certain dividends and
distributions, and reclassification, exchange or substitution. There is a 6%
dividend payable annually in kind on the shares of Series A Preferred Stock.
Accordingly, if Purchaser does not convert any shares prior to December 17,
2004, on such date it would own 99,697 shares of Series A Preferred Stock as a
result of the additional shares of Series A Preferred Stock issued in payment of
the 6% annual dividend; such 99,697 shares would automatically convert into
36,253,345 shares of Common Stock on such date.
The Warrant
- -----------
The Warrant entitles Purchaser to purchase up to 5,200,000 shares of Common
Stock at any time prior to May 27, 2006 at 5:00 p.m. at a purchase price of
$1.15 per share, subject to adjustment from time to time in the event of cash
dividends, stock dividends, stock subdivisions, stock splits, stock combinations
or reverse stock splits.
The 6 1/2% Convertible Subordinated Debentures
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The 6 1/2% Convertible Subordinated Debentures bear interest at 6 1/2% per annum
and are due November 30, 2004. Interest accrues until November 30, 2002 and,
together with one-third of the outstanding principal, is payable annually
commencing November 30, 2002. There are two Debentures, one in the principal
amount of approximately $22,000,000 and the other in the principal amount of
approximately $11,000,000, which are identical, except that the $22,000,000
Page 5 of 7 Pages
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CUSIP No. 65332H104 (Previous CUSIP NO.: 927186106)
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Debenture is convertible into Common Stock commencing November 30, 2002 at the
discretion of Purchaser, while the $11,000,000 Debenture is convertible only
with the permission of the Company. Subject to this distinction, the Debentures
are convertible into shares of Common Stock at any time on or after November 30,
2002 at a conversion price equal to 95% of the average of the closing prices for
the Common Stock on the Nasdaq National Market for the 30 consecutive trading
days prior to the conversion date. The balance of the $22,000,000 Debenture then
outstanding (estimated at approximately $7,500,000 if all scheduled principal
payments have been made) will automatically convert into Common Stock on
November 30, 2004.
Relationship Restructuring
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The Company and Purchaser are currently negotiating definitive agreements
whereby Purchaser would provide a $20 million line of credit to the Company or
Sub and would provide support to the Company for the completion of a private
placement financing. In connection therewith, the parties also contemplate
terminating an existing Marketing, Sales and Distribution Agreement and
transferring related assets to Sub to enable Sub to assume those
responsibilities directly. Under the proposed structure, Purchaser would
continue to provide contract manufacturing, physical distribution, instrument
placement and service, and related functions pursuant to new agreements.
Except as set forth above, to the best knowledge of Purchaser and Parent, no
contracts, arrangements, understandings or relationships (legal or otherwise)
exist among the persons named in Item 2 above, or between such persons and any
other person with respect to any securities of the Company, including, but not
limited to, transfer or voting of such securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss, or the giving or withholding or proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
EXHIBIT 7.1 Acquisition Agreement dated February 18, 1998, by and among the
Company, Purchaser and Sub (incorporated by reference to Annex A of
the Proxy Statement contained in the Schedule 14-A filed by the
Company) (Commission File No. 000-19153) on April 13, 1999.
EXHIBIT 7.2 Common Stock Purchase Warrant for 5,200,000 shares of Common Stock
of Nexell Therapeutics Inc.
EXHIBIT 7.3 Series 1, 6.5% Convertible Subordinated Debenture due November 30,
2004, in the amount of $21,923,025.
EXHIBIT 7.4 Series 2, 6.5% Convertible Subordinated Debenture due November 30,
2004, in the amount of $10,961,512.50
Page 6 of 7 Pages
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CUSIP No. 65332H104 (Previous CUSIP NO.: 927186106)
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S I G N A T U R E
After reasonable inquiry and to the best of my knowledge and belief, each of the
undersigned corporations certifies that the information set forth in this
statement is true, complete and correct.
Dated: June 8, 1999
BAXTER HEALTHCARE CORPORATION
By: /s/ Jan Stern Reed
-------------------------
Jan Stern Reed
Secretary
BAXTER INTERNATIONAL INC.
By: /s/ Jan Stern Reed
-------------------------
Jan Stern Reed
Secretary
Page 7 of 7 Pages
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EXHIBIT 7.2
Void after 5:00 p.m.
New York Time
May 27, 2006
NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC.
Common Stock Purchase Warrant
-------------------
THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE SOLD OR OTHERWISE DISPOSED
OF EXCEPT (A) TO A PERSON WHO, IN THE OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY, IS A PERSON TO WHOM
THE SECURITIES MAY BE LEGALLY TRANSFERRED WITHOUT
REGISTRATION AND WITHOUT DELIVERY OF A CURRENT PROSPECTUS
UNDER THE ACT, OR (B) TO A PERSON UPON DELIVERY OF A
PROSPECTUS OR OFFERING CIRCULAR THEN MEETING THE
REQUIREMENTS OF THE ACT RELATING TO SUCH SECURITIES AND
THE OFFERING THEREOF FOR SUCH SALE OR DISPOSITION.
-------------------
This certifies that, FOR VALUE RECEIVED, BAXTER HEALTHCARE CORPORATION
("Baxter"), or registered assigns (the "Holder") , is entitled to purchase,
subject to the provisions of this Warrant, from NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC., a Delaware corporation (the "Company"), 5,200,000
fully paid and nonassessable shares of the Company's common stock, $.001 par
value (the "Common Stock"), at a per share price of $1.15, from time to time or
at any time during the period commencing on the date hereof until 5:00 p.m., New
York Time, on May 27, 2006, at which time this Warrant shall expire and become
void. The number of shares of Common Stock to be received upon exercise of this
Warrant and the
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price to be paid for each such share of Common Stock are subject to possible
adjustment from time to time as hereinafter set forth. The shares of Common
Stock or other securities or property deliverable upon such exercise as adjusted
from time to time are hereinafter sometimes referred to as the "Warrant Shares"
and the exercise price of a share of Common Stock in effect at any time and as
adjusted from time to time is hereinafter sometimes referred to as the "Exercise
Price." Unless the context otherwise requires, the term "Warrant" as used herein
includes this Warrant and any other Warrant or Warrants which may be issued
pursuant to the provisions of this Warrant, whether upon transfer, assignment,
partial exercise, divisions, combinations, exchange or otherwise, and the term
"Holder" includes any permitted transferee or transferees or permitted assignee
or assignees of the Holder named above, all of whom shall be subject to the
provisions of this Warrant, and, when used with reference to Warrant Shares,
means the holder or holders of such Warrant Shares.
Section 1. Exercise of Warrant.
1.1. Method of Exercise. This Warrant may be exercised in
whole or in part, from time to time or at any time by the Holder during the
period commencing on the date hereof until 5:00 p.m., New York Time, on May 27,
2006 (the date by which this Warrant must be exercised hereinafter referred to
as the "Termination Date"), by presentation and surrender hereof to the Company
at its principal office with the Form of Subscription annexed hereto, duly
executed and accompanied by payment, by certified or official bank check payable
to the order of the Company, of the Exercise Price for the total number of
Warrant Shares purchased.
1.2. Delivery of Shares. Upon proper exercise of this
Warrant, the Company promptly shall deliver certificates for the Warrant Shares
to the Holder.
1.3. Partial Exercise. If this Warrant is exercised in part
only, the Company shall, upon presentation of this Warrant upon such exercise,
execute and deliver (with the certificate for the Warrant Shares purchased) a
new Warrant evidencing the rights of the Holder hereof to purchase the balance
of the Warrant Shares purchasable hereunder upon the same terms and conditions
as herein set forth.
1.4. Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon exercise of this Warrant
but, in lieu thereof, the Company shall round up to the next full share.
Section 2. Exercise Price and Adjustments.
2.1. Initial Exercise Price and Capital Adjustments. The
Exercise Price at which the Warrant Shares shall be purchasable shall be $1.15,
subject to adjustment from time to time in the event of cash dividends, stock
dividends, stock subdivisions, stock splits, stock combinations or reverse stock
splits, as follows: In the event the Company shall at any time after the date
hereof (a) pay a cash dividend to the holders of shares of its Common Stock, (b)
issue shares of its Common Stock as a stock dividend or (c) subdivide or split
or combine or reverse stock split the outstanding shares
2
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of its Common Stock, the Exercise Price shall forthwith proportionately be
decreased in the case of a cash dividend, stock dividend, stock subdivision or
stock split, or proportionately be increased in the case of a combination or
reverse stock split, to the nearest one cent to give effect to such change.
Concurrently, the number of Warrant Shares issuable upon exercise of this
Warrant shall be increased or decreased in proportion to the increase or
decrease in the number of shares of Common Stock outstanding resulting from such
change. Any such adjustment shall become effective at the close of business on
the date that the subdivision or combination shall become effective, in the
event of a subdivision or combination, or at the close of business on the record
date fixed for the determination of stockholders entitled to receipt of the cash
dividend or stock dividend, in the event of a cash dividend or stock dividend.
2.2. Reorganizations, Mergers and Sale of Assets. In the
event of any reorganization or reclassification of the outstanding shares of
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination) or in the case of any consolidation of the Company with, or merger
of the Company into, another corporation after which no securities of the
Company will be publicly held, or in the case of any sale, lease or conveyance
of all, or substantially all, of the property, assets, business and goodwill of
the Company as an entity, the Company will cause provision to be made so that
the Holder shall thereafter have the right upon exercise to purchase the kind
and amount of shares of stock and other securities and property receivable upon
such reorganization, reclassification, consolidation, merger or sale by a holder
of the number of shares of Common Stock which the Holder would have received had
he exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation, merger or sale, at a price equal to the
aggregate Exercise Price then in effect pertaining to this Warrant (the kind,
amount and price of such stock and other securities to be subject to adjustment
as herein provided). In the event that the Company enters into a letter of
intent or agreement providing for any of the foregoing (the "Merger Agreement"),
the Company may, at its option, upon written notice to the Holder at least
twenty (20) days prior to the Closing Date under the Merger Agreement, mandate
that the Holder exercise this Warrant for the balance of the Warrant Shares then
exercisable effective immediately prior to the Closing of such Merger Agreement.
In the event that, prior to such Closing Date, the Holder does not exercise this
Warrant in full, this Warrant shall expire effective as of such Closing Date as
to any unexercised portion. Upon a mandated exercise, the Holder shall receive
that amount of consideration with respect to the Warrant Shares, and at such
time, as and when a holder of the same number of shares of Common Stock
immediately prior to such Closing Date receives consideration on account of such
holder's shares pursuant to the Merger Agreement. The foregoing provisions shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, leases or conveyances.
2.3. Liquidation and Dissolution. In the event the Company
shall, at any time prior to the expiration of this Warrant and prior to the
exercise thereof, dissolve, liquidate or wind up its affairs, the Holder shall
be entitled, upon the exercise thereof, to receive, in lieu of the shares which
he would have been entitled to receive, the same kind and amount of assets as
would have been issued, distributed or paid to him
3
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upon any such dissolution, liquidation or winding up with respect to such shares
had he been the holder of record of such shares on the record date for the
determination of those entitled to receive any such liquidating distribution.
After any such dissolution, liquidation or winding up which shall result in any
cash distribution in excess of the Exercise Price provided for by this Warrant,
the Holder may, at his option, exercise the same without making payment of the
Exercise Price and in such case the company shall upon the distribution to the
Holder consider that the Exercise Price has been paid in full to it and, in
making settlement to the Holder, shall deduct from the amount payable to the
Holder an amount equal to such Exercise Price.
2.4. Amendments Not Required to Reflect Adjustments.
Irrespective of any adjustments in the Exercise Price or the number or kind of
shares purchasable upon exercise of this Warrant, this Warrant may continue to
express the same price and number and kind of shares as originally issued and
need not be amended to reflect each such adjustment.
2.5. Conclusiveness of Computation by Accountants. In the
event the Company shall retain a firm of independent public accountants of
recognized standing (who may be any such firm regularly employed by the Company)
to make any computation required under this Section 2, a certificate signed by
any such firm shall be conclusive evidence of the correctness of any computation
made under this Section 2.
Section 3. Exchange, Assignment or Loss of Warrant.
3.1. Exchange of Warrant. This Warrant is exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
hereof to the Company for other Warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of Warrant
Shares purchasable hereunder on the same terms and conditions as herein set
forth.
3.2. Assignment or Other Transfer of Warrant. The Holder may
transfer, sell, assign, pledge, hypothecate, create a security in or lien on,
place in trust (voting or otherwise), assign or in any other way encumber or
dispose of, directly or indirectly and whether or not by operation of law or for
value, this Warrant or the Warrant Shares, only upon compliance with Section 4
hereof. In the event of a permitted assignment, this Warrant must be presented
and surrendered to the Company at its principal office or at the office of its
stock transfer agent, if any, with the Form of Assignment annexed hereto duly
executed, and accompanied by funds sufficient to pay any transfer tax. Promptly
thereafter the Company shall, without charge, execute and deliver a new Warrant
in the name of the assignee named in such Form of Assignment and this Warrant
shall promptly be canceled.
3.3. Loss or Mutilation of Warrant. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in case of loss, theft or destruction) of
reasonably satisfactory indemnification (except that the holder shall not be
required to post an indemnity bond), and upon surrender and cancellation of this
Warrant, if mutilated, the Company will
4
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execute and deliver a new Warrant of like tenor and date and any such lost,
stolen or destroyed Warrant shall thereupon become void. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed
or mutilated shall be at any time enforceable by anyone.
Section 4. Compliance with Act.
4.1. Disposition of Warrant and/or Warrant Shares. This
Warrant and/or the Warrant Shares may not be sold or otherwise disposed of
except as follows:
(a) To a person who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom this Warrant or
the Warrant Shares may legally be transferred without
registration and without the delivery of a current prospectus
under the Act with respect thereto and then only against receipt
of an agreement of such person to comply with the provisions of
this Section 4 with respect to any resale or other disposition of
such securities unless, in the opinion of counsel, such agreement
is not required; or
(b) To any person upon delivery of a prospectus or offering
circular then meeting the requirements of the Act relating to
such securities and the offering thereof for such sale or
disposition.
4.2. Legend on Certificates. Each certificate for Warrant
Shares or for any other security issued or issuable upon exercise of this
Warrant shall contain a legend on the face thereof, in form and substance
satisfactory to counsel to the Company, setting forth the restrictions on
transfer thereof contained in this Section 4.
Section 5. Registration Rights. The Holder's registration rights
with respect to the Warrant Shares shall be governed by, and shall be in
accordance with, the terms and conditions of the Registration Rights Agreement,
dated as of December 17, 1997, as amended, between the Company and Baxter.
Section 6. Company Covenants.
6.1. Reservation and Issuance of Warrant Shares. The Company
hereby undertakes until expiration of this Warrant to reserve for issuance
and/or delivery upon exercise of this Warrant, such number of shares of its
Common Stock as shall be required for issuance and/or delivery upon exercise
hereon in full and agrees that all Warrant Shares so issued and/or delivered
will be validly issued, fully paid and nonassessable, and further agrees to pay
all taxes and charges that may be imposed upon such issuance and/or delivery.
5
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6.2. Officer's Certificate. In the event the Exercise Price
shall be adjusted as required by Section 2 hereof, the Company shall promptly
mail to the Holder an officer's certificate setting forth the adjustments so
required and including, in reasonable detail, the method of calculating the
adjustments and the transaction requiring the adjustment.
Section 7. Miscellaneous.
7.1. Status of Holder. The Holder shall not be entitled to
vote or receive dividends and shall not otherwise be deemed a shareholder of the
Company.
7.2. Notices. All notices required hereunder shall be sent by
first-class mail, postage prepaid, and shall be addressed, if to the Holder, to
the last known address furnished to the Company and if to the Company, to:
NEXELL THERAPEUTICS INC., 9 Parker, Irvine, California 92618, Attention: Chief
Executive Officer, unless another address is designated in writing by the Holder
or the Company.
7.3. Binding Effect. All of the covenants and provisions of
this Warrant by or for the benefit of the Company or the Holder shall bind and
inure to the benefit of the Company and the Holder and their respective
successors and permitted assigns.
7.4. Governing Law. This Warrant shall be deemed to be a
contract made under the laws of the State of Delaware and for all purposes shall
be construed in accordance with the internal laws of said state without regard
to conflicts of laws principles.
6
<PAGE>
IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the 28th day of May, 1999.
NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
/s/ Richard L. Dunning
By:___________________________
Richard L. Dunning
Chief Executive Officer
/s/ Lowell S. Lifschultz
__________________________
Lowell S. Lifschultz
Secretary
7
<PAGE>
FORM OF ASSIGNMENT
(To be signed only upon such permitted assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
the right represented by the within Warrant to purchase, from NEXELL
THERAPEUTICS INC. f/k/a VIMRx PHARMACEUTICALS INC. (the "Company"), shares of
the Common Stock of the Company, to which the within Warrant relates, and
appoints
attorney to transfer said right, with full power of substitution in the
premises.
Dated:
__________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant.)
In the presence of:
__________________________________
8
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by said Warrant for, and to
purchase thereunder, shares of Common Stock of the Company, and
herewith makes payment of $ therefor and requests that
such certificates) be issued in the name of and be delivered to
whose address is
and if such shares shall not be all of the shares purchased hereunder, that a
new Warrant of like tenor for the balance of shares purchasable hereunder be
delivered to the undersigned.
Dated:
__________________________________________
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant.)
In the presence of:
________________________________
9
<PAGE>
EXHIBIT 7.3
NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC.
SERIES 1
6.50% Convertible Subordinated Debenture
Due November 30, 2004
Principal Amount: $21,923,025.00
---------------------------------------------
This Debenture and the shares of
Common Stock issuable upon its conversion
have not been registered under the Securities
Act of 1933, as amended (the "Act"), and
may be transferred only in compliance with
the provisions thereof.
---------------------------------------------
NEXELL THERAPEUTICS INC. f/k/a VIMRX PHARMACEUTICALS INC., a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), which term includes any successor corporation succeeding to the
Company, for value received, hereby promises to pay to Baxter Healthcare
Corporation ("Baxter") or registered assigns (the "Holder"), the principal
amount of $21,923,025.00 on November 30, 2004, in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public or private debts, by check mailed and addressed to the Holder
at the address shown on the register maintained by the Company for such purpose
and to pay interest on the unpaid principal amount hereof from the date hereof
at the rate of six and one-half (6.5%) percent per annum, compounded annually,
in like coin or currency by check likewise mailed and addressed to the Holder at
said address. Payments of accrued interest and one-third of the original
<PAGE>
principal balance of this Debenture shall be made annually on the 30th day of
November in each year, commencing November 30, 2002, until the principal amount
thereof shall have been paid in full. The Company also promises to pay interest
on any overdue principal and (to the extent payment of such interest is
enforceable under applicable law) on any overdue installment of interest, at the
rate of ten (10%) percent per annum, compounded annually, until paid, payable
annually from and after November 30, 2002 as aforesaid.
1. The Debentures. This Debenture is one of two Debentures of the
Company of like tenor and maturity (except as to the conversion of such
Debentures) designated as its 6.50% Convertible Subordinated Debentures (the
"Debentures"), one labeled "Series 1" in the denomination $21,923,025.00, and
the other labeled "Series 2" in the denomination of $10,961,512.50, with both
maturing on November 30, 2004, and with both bearing interest payable at the
same rate and on the same annual dates for the principal amount of such
Debenture.
2. Exchange; Replacement of Debentures.
2.1. The Holder of this Debenture, or of a Debenture or
Debentures substituted therefor pursuant to the provisions of this Section 2, at
the option of such Holder may, in person or by duly authorized attorney,
surrender the same for exchange at the offices of the Company, and, within a
reasonable time thereafter, and without expense (except as provided below),
receive in exchange therefor a Debenture or Debentures dated as of the date to
which interest has been paid on the Debenture or Debentures so surrendered, or
if such surrender is prior to the date on which the first interest payment
hereon is due, then dated the date hereof, and payable to such person or persons
as may be designated by such Holder, for the same aggregate principal amount as
the then unpaid principal amount of the Debenture or Debentures so surrendered.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such exchange or transfer.
2.2. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Debenture, and of
indemnity or security satisfactory to it (except that the Company shall not
require the posting or delivery of any indemnity bond or surety) , and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Debenture, if mutilated, the Company
will make and deliver a new Debenture of like tenor, in lieu of this Debenture,
subject, however, to Section 7 hereof. Any Debenture made and delivered in
accordance with the provisions of this Section 2.2 shall be dated as of the date
to which interest has been paid on this Debenture, or if made and delivered
prior to the date on which the first payment of interest hereon is due, then
dated the date hereof.
3. Conversion of Debenture.
3.1. Conversion. The outstanding principal amount of this
Debenture may be converted in whole or in any part by the Holder on or after
5:00 p.m., New York Time, on November 30, 2002, and, if not sooner converted,
automatically shall be converted in its entirety (or any remainder thereof not
yet converted) at 5:00
2
<PAGE>
p.m., New York Time, on November 30, 2004 (any such date of conversion, the
"Conversion Date"), into fully paid and non-assessable shares of the Company's
common stock, $.001 par value (the "Common Stock", and the shares of Common
Stock issuable upon conversion of this Debenture being hereinafter called the
"Shares") at the conversion price of ninety-five percent (95%) of the average
closing prices of the Common Stock on the thirty (30) trading days preceding,
but not including, the Conversion Date, as reported by the Nasdaq National
Market (or such other market which is on the Conversion Date the principal
market by trading volume for the Common Stock) (the "Conversion Price"). All of
such Shares shall be deliverable to the Holder upon presentation and surrender
of this Debenture to the Company at its principal office. In the event the
Holder converts this Debenture in accordance with this Section 3.1,
notwithstanding the failure of the Holder to so deliver this Debenture for
conversion, the conversion into Shares shall nevertheless be effective for all
purposes, and no further interest shall accrue on the converted portion of this
Debenture, nor shall any principal be payable hereon except as to any
unconverted portion, which shall be paid as set forth in the preamble to this
Debenture.
3.2. Delivery of Shares. As promptly as practicable after the
date upon which this Debenture is received by the Company following the
Conversion Date, the Company shall issue and deliver to the Holder a certificate
for the number of full Shares issuable upon such conversion.
3.3. Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon conversion or partial
conversion of this Debenture. With respect to any fraction of a share which
would otherwise be issuable upon any such conversion, the Company shall issue
one additional full Share.
3.4. Accrued Interest on Conversion. The Company shall pay in
cash accrued interest on this Debenture that is converted through the date prior
to the Conversion Date.
3.5. Recapitalization, Merger and Sale of Assets. In the case
of any recapitalization, reclassification or change of the Company's outstanding
shares of Common Stock (other than a change in par value or from par value to no
par value, or as a result of a subdivision or combination), or in the case of
any consolidation or merger to which the Company is a party (other than a merger
or consolidation where the Company is the surviving corporation and which does
not result in any recapitalization, reclassification or change other than as
previously stated), or in the case of any sale, or conveyance of all, or
substantially all, of the property, assets, business and goodwill of the Company
as an entirety, provision shall be made, as part of the terms of any such
recapitalization, reclassification, consolidation, merger, sale or conveyance,
as to enable the Holder of this Debenture (in the principal amount hereof then
outstanding) to receive upon conversion, at the Conversion Price in effect at
the time of conversion and subject to the adjustments as herein provided, the
same kind, class and number of shares and other securities and property and/or
cash issued or paid as the Holder would have been entitled to receive had this
Debenture been converted immediately prior to the
3
<PAGE>
consummation of such recapitalization, reclassification, consolidation, merger,
sale or conveyance. In this situation, the Conversion Price shall be deemed to
be ninety-five percent (95%) of the value of the consideration received by the
holder of a share of Common Stock upon such occurrence.
3.6. Reservation of Shares. The Company shall at all times
reserve and keep available for issuance and/or delivery upon conversion of this
Debenture, such number of shares of its Common Stock as shall be required for
issuance upon conversion of this Debenture after giving effect to any
adjustments required hereunder.
4. Redemption.
4.1. The Company may, at its option and then only if agreed to
at the sole discretion of the Holder, at any time redeem all but not less than
all, of the Debentures at a redemption price (the "Redemption Price") equal to
105% of the principal amount thereof prior to the November 30, 1999 or 103% of
the principal amount thereof prior to November 30, 2001 or the principal amount
thereof after November 30, 2001, plus in each case interest accrued to the date
fixed for redemption (any such date of redemption, the "Redemption Date").
4.2. Not less than 30 days prior to the Redemption Date a
notice (the "Redemption Notice") specifying the Redemption Date shall be given
by registered or certified mail, return receipt requested, to the holders of
record of the Debentures (including the Holder) at their respective addresses as
the same shall appear on the books of the Company. Any Redemption Notice which
was mailed to the Holder in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the Holder receives the notice.
4.3. Not more than three business days after receipt of the
original of this Debenture from the Holder, the Company shall send to the Holder
by registered or certified mail addressed to such holder at the address to which
the Redemption Notice was sent, a certified or cashier's check equal to the
Redemption Price of such holder's Debenture which shall thereafter not be
outstanding for any purpose.
5. Subordination.
5.1. The payment of the principal of and premium and interest
on this Debenture is expressly subordinated to the payment of all Senior
Indebtedness, as hereinafter defined, and, by acceptance of this Debenture, the
Holder hereof agrees, expressly for the benefit of the present and future
holders of Senior Indebtedness, to be bound by the provisions hereof and
authorizes and directs the Company on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided herein and
appoints the Company his attorney-in-fact for any and all such purposes. "Senior
Indebtedness" means all obligations of the Company to any person whose business
includes the lending of money to commercial enterprises, which such person is
subject to the jurisdiction of any federal or state regulatory agency that
grants licenses for the purposes of such person to conduct such business.
4
<PAGE>
5.2. Upon any distribution of assets of the Company pursuant
to any dissolution, winding up, liquidation or reorganization of the Company,
whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or any marshalling of the assets and
liabilities of the Company or otherwise, the holders of all Senior Indebtedness
shall first be entitled to receive payment in full of the principal thereof and
premium, if any, and the interest due thereon before the Holder of this
Debenture becomes entitled to receive any payment upon the principal of (and
premium, if any) or interest on indebtedness evidenced by this Debenture; and
upon any such dissolution, winding up, liquidation or reorganization, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than securities of the Company as
reorganized or readjusted or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated to the payment of all Senior Indebtedness that may at any time
be outstanding) to which the Holder of this Debenture would be entitled except
for the provisions of this Section 5 shall be paid by the liquidating trustee or
agent or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, direct to the
holders of Senior Indebtedness or their representative or representatives,
ratably according to the aggregate amounts remaining unpaid on account of the
principal of and premium, if any, and interest on the Senior Indebtedness held
or represented by each, to the extent necessary to pay in full all Senior
Indebtedness.
5.3. If any Senior Indebtedness shall be declared in default,
as defined in the instruments creating such Senior Indebtedness, and such
default shall be continuing, or such Senior Indebtedness shall become due and
payable by lapse of time, acceleration or otherwise, then all principal of and
premium, if any, and interest on all such matured Senior Indebtedness shall
first be paid in full, or such payment shall have been duly provided for, before
any payment on account of principal of or premium, if any, and interest is made
by the Company on this Debenture.
5.4. Nothing contained in this Debenture shall prevent the
Company, except at any time during the pendency of any dissolution, winding up,
liquidation or reorganization proceedings referred to in Section 5.2, or under
the conditions described in Section 5.3, from making payments at any scheduled
time, of interest on this Debenture.
5.5. No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any non-compliance by the Company with the terms, provisions
and covenants of this Debenture, regardless of any knowledge thereof any such
holder may have to be otherwise charged with.
5
<PAGE>
6. Default.
6.1. Definition. The term "default" wherever used in this
Debenture shall mean one of the following events:
(a) The failure of the Company for a period of 15 days to pay
any installment of principal or interest on this Debenture when and as
the same shall become due and payable, notwithstanding the
subordination provisions hereof, except that failure to make any
payment of principal when prohibited by Section 5 shall not constitute
an event of default;
(b) The entry by a court of competent jurisdiction of a decree
or order (i) approving a petition seeking the reorganization of the
Company under the Federal bankruptcy laws or any other similar
applicable law or statute of the United States of America or any State
thereof, or (ii) appointing a trustee or receiver of the Company or of
all or any substantial part of its property upon the application of
any creditor in any insolvency or bankruptcy proceeding or other
creditor's suit, and such decree or order shall have continued
undischarged for an aggregate period of 90 days; or
(c) The adjudication of the Company as a bankrupt by a court of
competent jurisdiction; or the filing by the Company of a petition in
voluntary bankruptcy or the making by it of an assignment for the
benefit of creditors or the consenting by it to the appointment of a
receiver or receivers of all or any substantial part of the property
of the Company; or the filing by the Company of a petition or answer
seeking reorganization under the Federal bankruptcy laws or any other
similar applicable law or statute of the United States of America or
any State thereof; or the filing by the Company of a petition to take
advantage of any debtor's act.
6.2. Rights of Holder to Accelerate. If any one or more of
the foregoing defaults shall happen, then during the continuance of any such
default, the Holder hereof, by notice in writing to the Company, may declare the
principal of this Debenture to be due and payable, and upon any such declaration
the same shall become and be immediately due and payable. However, the right to
actual payment shall continue to be subject to the subordination provisions of
Section 5 and any prior rights of the holders of any Senior Indebtedness.
7. Compliance with the Securities Act of 1933.
7.1. Disposition of Debenture and/or Shares. Subject to the
Holder's rights, if any, under the Registration Rights Agreement, dated as of
December 17, 1997, between the Company and Baxter, as amended (the "Registration
Rights Agreement"), this Debenture and/or the Shares issued upon conversion
hereof may not be sold or otherwise disposed of except as follows:
6
<PAGE>
(a) To a person who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom this Debenture or the
Shares may legally be transferred without registration and without the
delivery of a current prospectus under the Act with respect thereto
and then only against receipt of an agreement of such person to comply
with the provisions of this Section 7 with respect to any resale or
other disposition of such securities unless, in the opinion of
counsel, such agreement is not required; or
(b) To any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering
thereof for such sale or disposition.
7.2. Legending of Certificates. Subject to the Holder's
rights, if any, under the Registration Rights Agreement, each certificate for
the Shares or for any other security issued or issuable upon conversion of this
Debenture shall contain a legend on the face thereof, in form and substance
satisfactory to counsel to the Company, setting forth the restrictions on
transfer thereof contained in this Section 7.
8. Registered Owner. The Company may deem and treat the person in
whose name this Debenture is registered as the absolute owner hereof (whether or
not this Debenture or interest hereon shall be overdue) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon, and for all other purposes, and the Company shall not be affected by any
notice to the contrary.
9. Section and Other Headings. Section and other headings in this
Debenture are for convenience of reference only and shall not affect the meaning
or interpretation of this Debenture.
10. Applicable Law. This Debenture shall be construed and enforced
in accordance with the laws of the State of Delaware.
7
<PAGE>
IN WITNESS WHEREOF, the Company has duly caused this Debenture to be
signed in its name by its Chief Executive Officer by his manual signature or a
facsimile thereof, and the corporate seal to be imprinted hereon.
Dated: May 28, 1999 NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
/s/ Richard L. Dunning
By:________________________________
Richard L. Dunning
Chief Executive Officer
/s/ Lowell S. Lifschultz
______________________________
Lowell S. Lifschultz
Secretary
8
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________ hereby sells,
assigns and transfers the within Debenture, subject to the provisions of
Section 7 thereof, unto ____________________________________________________
(Please typewrite or print in block letters)
with an address of ________________________________________________________
and does hereby irrevocably constitute and appoint ___________________________
attorney to transfer the same on the books of the Company with full power of
substitution in the premises.
Signature_________________________________
Dated:__________________________
9
<PAGE>
CONVERSION FORM
Dated: _____________________
The undersigned hereby surrenders the within Debenture for conversion
into Common Stock, $.001 par value ("Common Stock"), of Nexell Therapeutics Inc.
f/k/a VIMRx Pharmaceuticals Inc. (the "Company") to the extent of the full
principal amount thereof.
The undersigned hereby acknowledges that, unless registered pursuant
to a certain Registration Rights Agreement, dated as of December 17, 1997,
between the Company and Baxter Healthcare Corporation, as amended (the
"Registration Rights Agreement"), the shares of Common Stock issuable upon such
conversion will not be registered under the Securities Act of 1933, as amended
(the "Act"), and (ii) may not be resold except in accordance with the
requirements of such Act, including Rule 144 thereunder, if applicable. Unless
registered pursuant to the Registration Rights Agreement, the undersigned
further consents to the placing of a legend on the certificates for the shares
of Common Stock to be issued upon such conversion to the foregoing effect.
Name____________________________________________________________________________
(Please typewrite or print in block letters.)
Address_________________________________________________________________________
________________________________________________________________________________
Signature________________________________
10
<PAGE>
EXHIBIT 7.4
NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC.
SERIES 2
6.50% Convertible Subordinated Debenture
Due November 30, 2004
Principal Amount: $10,961,512.50
---------------------------------------------
This Debenture and the shares of
Common Stock issuable upon its conversion
have not been registered under the Securities
Act of 1933, as amended (the "Act"), and
may be transferred only in compliance with
the provisions thereof.
---------------------------------------------
NEXELL THERAPEUTICS INC. f/k/a VIMRX PHARMACEUTICALS INC., a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), which term includes any successor corporation succeeding to the
Company, for value received, hereby promises to pay to Baxter Healthcare
Corporation ("Baxter") or registered assigns (the "Holder"), the principal
amount of $10,961,512.50 on November 30, 2004, in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public or private debts, by check mailed and addressed to the Holder
at the address shown on the register maintained by the Company for such purpose
and to pay interest on the unpaid principal amount hereof from the date hereof
at the rate of six and one-half (6.5%) percent per annum,
<PAGE>
compounded annually, in like coin or currency by check likewise mailed and
addressed to the Holder at said address. Payments of accrued interest and one-
third of the original principal balance of this Debenture shall be made annually
on the 30th day of November in each year, commencing November 30, 2002, until
the principal amount thereof shall have been paid in full. The Company also
promises to pay interest on any overdue principal and (to the extent payment of
such interest is enforceable under applicable law) on any overdue installment of
interest, at the rate of ten (10%) percent per annum, compounded annually, until
paid, payable annually from and after November 30, 2002 as aforesaid.
1. The Debentures. This Debenture is one of two Debentures of the
Company of like tenor and maturity (except as to the conversion of such
Debentures) designated as its 6.50% Convertible Subordinated Debentures (the
"Debentures"), one labeled "Series 1" in the denomination of $21,923,025.00, and
the other labeled "Series 2" in the denomination of $10,961,512.50, with both
maturing on November 30, 2004, and with both bearing interest payable at the
same rate and on the same annual dates for the principal amount of such
Debenture.
2. Exchange; Replacement of Debentures.
2.1. The Holder of this Debenture, or of a Debenture or
Debentures substituted therefor pursuant to the provisions of this Section 2, at
the option of such Holder may, in person or by duly authorized attorney,
surrender the same for exchange at the offices of the Company, and, within a
reasonable time thereafter, and without expense (except as provided below),
receive in exchange therefor a Debenture or Debentures dated as of the date to
which interest has been paid on the Debenture or Debentures so surrendered, or
if such surrender is prior to the date on which the first interest payment
hereon is due, then dated the date hereof, and payable to such person or persons
as may be designated by such Holder, for the same aggregate principal amount as
the then unpaid principal amount of the Debenture or Debentures so surrendered.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such exchange or transfer.
2.2. Upon receipt by the Company of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Debenture, and of
indemnity or security satisfactory to it (except that the Company shall not
require the posting or delivery of any indemnity bond or surety) , and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Debenture, if mutilated, the Company
will make and deliver a new Debenture of like tenor, in lieu of this Debenture,
subject, however, to Section 7 hereof. Any Debenture made and delivered in
accordance with the provisions of this Section 2.2 shall be dated as of the date
to which interest has been paid on this Debenture, or if made and delivered
prior to the date on which the first payment of interest hereon is due, then
dated the date hereof.
2
<PAGE>
3. Conversion of Debenture.
3.1. Conversion. With the prior written consent of the
Company, which may be granted or withheld in its sole discretion, the Holder may
elect, on or after 5:00 p.m., New York Time, on November 30, 2002 (any such date
of conversion, the "Conversion Date"), to convert all or any part of the
outstanding principal amount of this Debenture into fully paid and non-
assessable shares of the Company's common stock, $.001 par value (the "Common
Stock", and the shares of Common Stock issuable upon conversion of this
Debenture being hereinafter called the "Shares") at the conversion price of
ninety-five percent (95%) of the average closing prices of the Common Stock on
the thirty (30) trading days preceding, but not including, the Conversion Date,
as reported by the Nasdaq National Market (or such other market which is on the
Conversion Date the principal market by trading volume for the Common Stock)
(the "Conversion Price"). All of such Shares shall be deliverable to the Holder
upon presentation and surrender of this Debenture to the Company at its
principal office. In the event the Holder converts this Debenture in accordance
with this Section 3.1, notwithstanding the failure of the Holder to so deliver
this Debenture for conversion, the conversion into Shares shall nevertheless be
effective for all purposes, and no further interest shall accrue on the
converted portion of this Debenture, nor shall any principal be payable hereon
except as to any unconverted portion, which shall be paid as set forth in the
preamble to this Debenture.
3.2. Delivery of Shares. As promptly as practicable after the
date upon which this Debenture is received by the Company following the
Conversion Date, the Company shall issue and deliver to the Holder a certificate
for the number of full Shares issuable upon such conversion.
3.3. Fractional Shares. No fractional shares or scrip
representing fractional shares shall be issued upon conversion or partial
conversion of this Debenture. With respect to any fraction of a share which
would otherwise be issuable upon any such conversion, the Company shall issue
one additional full Share.
3.4. Accrued Interest on Conversion. The Company shall pay in
cash accrued interest on this Debenture that is converted through the date prior
to the Conversion Date.
3.5. Recapitalization, Merger and Sale of Assets. In the case
of any recapitalization, reclassification or change of the Company's outstanding
shares of Common Stock (other than a change in par value or from par value to no
par value, or as a result of a subdivision or combination), or in the case of
any consolidation or merger to which the Company is a party (other than a merger
or consolidation where the Company is the surviving corporation and which does
not result in any recapitalization, reclassification or change other than as
previously stated), or in the case of any sale, or conveyance of all, or
substantially all, of the property, assets, business and goodwill of the Company
as an entirety, provision shall be made, as part of the terms of any such
recapitalization, reclassification, consolidation, merger, sale or conveyance,
as to enable
3
<PAGE>
the Holder of this Debenture (in the principal amount hereof then outstanding)
to receive upon conversion, at the Conversion Price in effect at the time of
conversion and subject to the adjustments as herein provided, the same kind,
class and number of shares and other securities and property and/or cash issued
or paid as the Holder would have been entitled to receive had this Debenture
been converted immediately prior to the consummation of such recapitalization,
reclassification, consolidation, merger, sale or conveyance. In this situation,
the Conversion Price shall be deemed to be ninety-five percent (95%) of the
value of the consideration received by the holder of a share of Common Stock
upon such occurrence.
3.6. Reservation of Shares. The Company shall at all times
reserve and keep available for issuance and/or delivery upon conversion of this
Debenture, such number of shares of its Common Stock as shall be required for
issuance upon conversion of this Debenture after giving effect to any
adjustments required hereunder.
4. Redemption.
4.1. The Company may, at its option and then only if agreed to
at the sole discretion of the Holder, at any time redeem all but not less than
all, of the Debentures at a redemption price (the "Redemption Price") equal to
105% of the principal amount thereof prior to the November 30, 1999 or 103% of
the principal amount thereof prior to November 30, 2001 or the principal amount
thereof after November 30, 2001, plus in each case interest accrued to the date
fixed for redemption (any such date of redemption, the "Redemption Date").
4.2. Not less than 30 days prior to the Redemption Date a
notice (the "Redemption Notice") specifying the Redemption Date shall be given
by registered or certified mail, return receipt requested, to the holders of
record of the Debentures (including the Holder) at their respective addresses as
the same shall appear on the books of the Company. Any Redemption Notice which
was mailed to the Holder in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the Holder receives the notice.
4.3. Not more than three business days after receipt of the
original of this Debenture from the Holder, the Company shall send to the Holder
by registered or certified mail addressed to such holder at the address to which
the Redemption Notice was sent, a certified or cashier's check equal to the
Redemption Price of such holder's Debenture which shall thereafter not be
outstanding for any purpose.
5. Subordination.
5.1. The payment of the principal of and premium and interest
on this Debenture is expressly subordinated to the payment of all Senior
Indebtedness, as hereinafter defined, and, by acceptance of this Debenture, the
Holder hereof agrees, expressly for the benefit of the present and future
holders of Senior Indebtedness, to be bound by the provisions hereof and
authorizes and directs the Company on his behalf to
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take such action as may be necessary or appropriate to effectuate the
subordination as provided herein and appoints the Company his attorney-in-fact
for any and all such purposes. "Senior Indebtedness" means all obligations of
the Company to any person whose business includes the lending of money to
commercial enterprises, which such person is subject to the jurisdiction of any
federal or state regulatory agency that grants licenses for the purposes of such
person to conduct such business.
5.2. Upon any distribution of assets of the Company pursuant
to any dissolution, winding up, liquidation or reorganization of the Company,
whether in bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or any marshalling of the assets and
liabilities of the Company or otherwise, the holders of all Senior Indebtedness
shall first be entitled to receive payment in full of the principal thereof and
premium, if any, and the interest due thereon before the Holder of this
Debenture becomes entitled to receive any payment upon the principal of (and
premium, if any) or interest on indebtedness evidenced by this Debenture; and
upon any such dissolution, winding up, liquidation or reorganization, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than securities of the Company as
reorganized or readjusted or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated to the payment of all Senior Indebtedness that may at any time
be outstanding) to which the Holder of this Debenture would be entitled except
for the provisions of this Section 5 shall be paid by the liquidating trustee or
agent or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, direct to the
holders of Senior Indebtedness or their representative or representatives,
ratably according to the aggregate amounts remaining unpaid on account of the
principal of and premium, if any, and interest on the Senior Indebtedness held
or represented by each, to the extent necessary to pay in full all Senior
Indebtedness.
5.3. If any Senior Indebtedness shall be declared in default,
as defined in the instruments creating such Senior Indebtedness, and such
default shall be continuing, or such Senior Indebtedness shall become due and
payable by lapse of time, acceleration or otherwise, then all principal of and
premium, if any, and interest on all such matured Senior Indebtedness shall
first be paid in full, or such payment shall have been duly provided for, before
any payment on account of principal of or premium, if any, and interest is made
by the Company on this Debenture.
5.4. Nothing contained in this Debenture shall prevent the
Company, except at any time during the pendency of any dissolution, winding up,
liquidation or reorganization proceedings referred to in Section 5.2, or under
the conditions described in Section 5.3, from making payments at any scheduled
time, of interest on this Debenture.
5.5. No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the
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Company or by any act or failure to act, in good faith, by any such holder, or
by any non-compliance by the Company with the terms, provisions and covenants of
this Debenture, regardless of any knowledge thereof any such holder may have to
be otherwise charged with.
6. Default.
6.1. Definition. The term "default" wherever used in this
Debenture shall mean one of the following events:
(a) The failure of the Company for a period of 15 days to pay
any installment of principal or interest on this Debenture when and as
the same shall become due and payable, notwithstanding the
subordination provisions hereof, except that failure to make any
payment of principal when prohibited by Section 5 shall not constitute
an event of default;
(b) The entry by a court of competent jurisdiction of a decree
or order (i) approving a petition seeking the reorganization of the
Company under the Federal bankruptcy laws or any other similar
applicable law or statute of the United States of America or any State
thereof, or (ii) appointing a trustee or receiver of the Company or of
all or any substantial part of its property upon the application of
any creditor in any insolvency or bankruptcy proceeding or other
creditor's suit, and such decree or order shall have continued
undischarged for an aggregate period of 90 days; or
(c) The adjudication of the Company as a bankrupt by a court of
competent jurisdiction; or the filing by the Company of a petition in
voluntary bankruptcy or the making by it of an assignment for the
benefit of creditors or the consenting by it to the appointment of a
receiver or receivers of all or any substantial part of the property
of the Company; or the filing by the Company of a petition or answer
seeking reorganization under the Federal bankruptcy laws or any other
similar applicable law or statute of the United States of America or
any State thereof; or the filing by the Company of a petition to take
advantage of any debtor's act.
6.2. Rights of Holder to Accelerate. If any one or more of
the foregoing defaults shall happen, then during the continuance of any such
default, the Holder hereof, by notice in writing to the Company, may declare the
principal of this Debenture to be due and payable, and upon any such declaration
the same shall become and be immediately due and payable. However, the right to
actual payment shall continue to be subject to the subordination provisions of
Section 5 and any prior rights of the holders of any Senior Indebtedness.
7. Compliance with the Securities Act of 1933.
7.1. Disposition of Debenture and/or Shares. Subject to the
Holder's rights, if any, under the Registration Rights Agreement, dated as of
December
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17, 1997, between the Company and Baxter, as amended (the "Registration Rights
Agreement"), this Debenture and/or the Shares issued upon conversion hereof may
not be sold or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom this Debenture or the
Shares may legally be transferred without registration and without the
delivery of a current prospectus under the Act with respect thereto
and then only against receipt of an agreement of such person to comply
with the provisions of this Section 7 with respect to any resale or
other disposition of such securities unless, in the opinion of
counsel, such agreement is not required; or
(b) To any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering
thereof for such sale or disposition.
7.2. Legending of Certificates. Subject to the Holder's
rights, if any, under the Registration Rights Agreement, each certificate for
the Shares or for any other security issued or issuable upon conversion of this
Debenture shall contain a legend on the face thereof, in form and substance
satisfactory to counsel to the Company, setting forth the restrictions on
transfer thereof contained in this Section 7.
8. Registered Owner. The Company may deem and treat the person in
whose name this Debenture is registered as the absolute owner hereof (whether or
not this Debenture or interest hereon shall be overdue) for the purpose of
receiving payment of or on account of the principal hereof and interest due
hereon, and for all other purposes, and the Company shall not be affected by any
notice to the contrary.
9. Section and Other Headings. Section and other headings in this
Debenture are for convenience of reference only and shall not affect the meaning
or interpretation of this Debenture.
10. Applicable Law. This Debenture shall be construed and enforced
in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the Company has duly caused this Debenture to be
signed in its name by its Chief Executive Officer by his manual signature or a
facsimile thereof, and the corporate seal to be imprinted hereon.
Dated: May 28, 1999 NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
/s/ Richard L. Dunning
By:_______________________________
Richard L. Dunning
Chief Executive Officer
/s/ Lowell S. Lifschultz
_________________________
Lowell S. Lifschultz
Secretary
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ASSIGNMENT FORM
FOR VALUE RECEIVED, __________________________________ hereby sells,
assigns and transfers the within Debenture, subject to the provisions of
Section 7 thereof, unto ____________________________________________________
(Please typewrite or print in block letters)
with an address of ________________________________________________________
and does hereby irrevocably constitute and appoint ___________________________
attorney to transfer the same on the books of the Company with full power of
substitution in the premises.
Signature_________________________________
Dated:_________________________
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CONVERSION FORM
Dated: _____________________
The undersigned hereby surrenders the within Debenture for conversion
into Common Stock, $.001 par value ("Common Stock"), of Nexell Therapeutics Inc.
f/k/a VIMRx Pharmaceuticals Inc. (the "Company") to the extent of the full
principal amount thereof.
The undersigned hereby acknowledges that, unless registered pursuant
to a certain Registration Rights Agreement, dated as of December 17, 1997,
between the Company and Baxter Healthcare Corporation, as amended (the
"Registration Rights Agreement"), the shares of Common Stock issuable upon such
conversion will not be registered under the Securities Act of 1933, as amended
(the "Act"), and (ii) may not be resold except in accordance with the
requirements of such Act, including Rule 144 thereunder, if applicable. Unless
registered pursuant to the Registration Rights Agreement, the undersigned
further consents to the placing of a legend on the certificates for the shares
of Common Stock to be issued upon such conversion to the foregoing effect.
Name____________________________________________________________________________
(Please typewrite or print in block letters.)
Address_________________________________________________________________________
________________________________________________________________________________
Signature________________________________
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