<PAGE> 1
THIS DOCUMENT IS A COPY OF THE SCHEDULE 13D FILED ON DECEMBER 16, 1996
PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. __)1
Zynaxis, Inc.
(Name of Issuer)
Common Stock, $0.01 par value per share
(Title of Class of Securities)
989864103
(CUSIP Number)
Mark W. Reynolds
CytRx Corporation
154 Technology Parkway, Technology Park/Atlanta
Norcross, Georgia 30092
(770) 368-9500
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 6, 1996
(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(b)(3) or (4), check the following box .
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-l(a) for other parties to whom copies are to
be sent.
(Continued on following pages)
(Page 1 of 83 Pages)
1 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).
<PAGE> 2
CUSIP No. 989864103 13D Page 2 of 83 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
CytRx Corporation
I.R.S. Identification No. 58-1642740
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
8 SHARED VOTING POWER
2,092,608 shares*
9 SOLE DISPOSITIVE POWER
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,092,608 shares*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.7%
14 TYPE OF REPORTING PERSON
CO
* The number of shares and percentage indicated are the numbers of votes to be
cast and percentage of votes to be cast pursuant to voting agreements with the
reporting person entered into on December 6, 1996, and described in Item 4 of
this report. The reporting person expressly disclaims beneficial ownership of
any of the shares of common stock of the registrant as to which it may be deemed
to share voting power pursuant to the voting agreements.
(Page 2 of 83 Pages)
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Item 1. Security and Issuer.
This statement relates to the Common Stock of Zynaxis, Inc. ("Zynaxis"), par
value $0.01 per share ("Common"). Zynaxis is a Pennsylvania corporation whose
principal executive offices are located at 371 Phoenixville Pike, Malvern,
Pennsylvania 19355.
Item 2. Identity and Background.
This statement is being filed by CytRx Corporation ("CytRx"). CytRx's
principal business is the development and commercialization of pharmaceutical
related products and services including human therapeutics. The address of
CytRx's principal business and principal executive office is 154 Technology
Parkway, Technology Park/Atlanta, Norcross, Georgia 30092 ("CytRx").
To the best of CytRx's knowledge, during the last five years, neither CytRx
nor any of its directors or executive officers has been convicted in any
criminal proceeding (excluding traffic violations or similar misdemeanors) nor
has CytRx or any of its directors or executive officers been a party to any
civil proceeding of a judicial or administrative body of competent jurisdiction
resulting in 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.
Attached hereto as Exhibit 1 and incorporated in this Item 2 by this
reference is certain additional information concerning the directors and
executive officers of CytRx.
Item 3. Source and Amount of Funds or Other Consideration.
Because the nature of CytRx's deemed beneficial ownership of shares of Common
is limited to the terms of the Voting Agreements described herein, this item is
inapplicable.
Item 4. Purpose of Transaction.
In order to facilitate the approval by the shareholders of Zynaxis of the
transactions contemplated by an Agreement and Plan of Merger and Contribution
dated as of December 6, 1996 (the "Merger Agreement") among CytRx, Vaxcel, Inc.,
a Delaware corporation and a wholly-owned subsidiary of CytRx ("Vaxcel"), Vaxcel
Merger Subsidiary, Inc., a Georgia corporation and a wholly-owned subsidiary of
Vaxcel ("Vaxcel Merger Sub"), and Zynaxis, CytRx entered into Shareholder Voting
Agreements (the "Voting Agreements") with persons holding an aggregate of
1,382,608 shares of Common and 355,000 shares of Series A Convertible Preferred
Stock ("Convertible Preferred") of Zynaxis. Pursuant to the Voting Agreements,
such shareholders agreed to vote shares of Common and Convertible Preferred held
by them in favor of approval of the transactions contemplated by the Merger
Agreement at every meeting of the shareholders of Zynaxis at which such matters
are considered and at every adjournment thereof and against alternative
proposals. Except as provided by law, or in connection with the election of
directors, the holders of Convertible Preferred vote together with the holders
of Common as a single class, with each holder of Convertible Preferred being
entitled to the number of votes equal to the number of shares of Common into
which each such share of Convertible Preferred could be converted. As of the
time of execution of the Voting Agreements each share of Convertible Preferred
was convertible into 2 shares of Common and there were 10,338,768 shares of
Common and 1,500,000 shares of Convertible Preferred outstanding. Therefore, at
the time of execution of the Voting Agreements CytRx gained the right to direct
2,092,608 out of 13,338,768 (15.7%) of the votes that could be cast with respect
to the transactions contemplated by the Merger Agreement by the holders of
Common and the holders of Convertible Preferred
(Page 3 of 83 Pages)
<PAGE> 4
voting together as a single class. CytRx Corporation does not have any
pecuniary interest in such shares and, therefore, disclaims beneficial ownership
thereof.
The Voting Agreements provide that they will terminate upon the first to
occur of (i) the closing of the transactions contemplated by the Merger
Agreement, or (ii) the date on which the Merger Agreement is terminated in
accordance with its terms; provided that if prior to termination of the Merger
Agreement the approval of the shareholders of Zynaxis to the transaction shall
not have been obtained or any person shall have made a proposal competing with
the transactions contemplated by the Merger Agreement, then, for a period of one
year following termination of the Merger Agreement the agreement to vote the
shares subject to the Voting Agreements in favor of the transactions
contemplated by the Merger Agreement shall continue in full force and effect.
The Merger Agreement provides, among other things, for the merger of Vaxcel
Merger Sub with and into Zynaxis (the "Merger"). Upon consummation of the
Merger, which is subject to the approval of Zynaxis shareholders and the
satisfaction or waiver of various other terms and conditions, each share of
Common (excluding shares held by Zynaxis or CytRx or any of their subsidiaries,
and excluding shares held by Zynaxis shareholders who perfect their statutory
dissenters' rights or objection rights under Section 2545 of the Pennsylvania
Business Corporation Law) issued and outstanding shall be converted into and
exchanged for the right to receive a number of shares of the common stock, $.001
par value per share, of Vaxcel ("Vaxcel Common Stock") equal to the "Exchange
Ratio" (as defined in the Merger Agreement) and each share of Convertible
Preferred (excluding shares held by Zynaxis or CytRx or any of their
subsidiaries, and excluding shares held by Zynaxis shareholders who perfect
their statutory dissenters' rights or objection rights under Section 2545 of the
Pennsylvania Business Corporation Law) issued and outstanding shall be converted
into and exchanged for the right to receive a number of shares of Vaxcel Common
Stock equal to two times the Exchange Ratio. As a result of the Merger, Zynaxis
will become a wholly-owned subsidiary of Vaxcel and the current shareholders of
Zynaxis would own 12.5% of the outstanding Vaxcel Common Stock, which will be
registered under the Securities Exchange Act of 1934, as amended, and is
intended to be listed on the Nasdaq SmallCap Market. CytRx will own the other
87.5% of outstanding Vaxcel Common Stock.
Certain holders of shares of Convertible Preferred, warrants and convertible
promissory notes issued by Zynaxis have entered into agreements consenting to
the transactions contemplated by the Merger Agreement and agreeing to accept
shares of Vaxcel Common Stock in exchange for their convertible notes. These
agreements, copies of which are attached as Exhibits 6 and 7 to this filing, are
incorporated in this Item 4 by this reference.
In connection with the Merger, CytRx will be issued a warrant exercisable to
purchase shares of Vaxcel Common Stock at a discount price if an additional
investment by CytRx is required in order for Vaxcel to satisfy Nasdaq SmallCap
Market quantitative inclusion requirements. This warrant, a copy of which is
attached as Exhibit 2 to this filing, is incorporated in this Item 4 by this
reference.
Also in connection with the Merger, the officers and directors of Zynaxis
will be replaced with officers and directors specified in the Merger Agreement,
the Common will be delisted from the Nasdaq SmallCap Market, and the Common will
become eligible for termination of registration pursuant to Section 12(g)(4) of
the Securities Exchange Act of 1934, as amended. The Merger Agreement provides
that at the shareholder meeting being held to approve the transactions
contemplated by the Merger Agreement, the shareholders of Zynaxis will be asked
to approve an amendment to the articles of incorporation of Zynaxis that would
provide that Subchapter 25E (relating to control transactions) will not apply to
the Merger. A
(Page 4 of 83 Pages)
<PAGE> 5
copy of the form of the proposed amendment is attached as Exhibit 4 to this
filing and is incorporated in this Item 4 by this reference.
In connection with transactions contemplated by the Merger Agreement, the
Board of Directors of Zynaxis has approved the sale of substantially all of the
assets and the settlement of all of the liabilities of Zynaxis for prices and
amounts set forth in exhibits to a liquidation agreement entered into in
connection with the execution and delivery of the Merger Agreement (the
"Liquidation Agreement"). Pursuant to the Liquidation Agreement, CytRx will
serve as Zynaxis's agent in the attempt to sell substantially all of the assets
and settle all of the liabilities of Zynaxis. A copy of the Liquidation
Agreement is attached as Exhibit 5 to this filing, and is incorporated in this
Item 4 by this reference.
In order to provide Zynaxis with funds that it will need in order to continue
to operate until the closing of the Merger, CytRx extended a secured loan to
Zynaxis in connection with the execution and delivery of the Merger Agreement.
Item 5. Interest in Securities of the Issuer.
The 2,092,608 votes of which CytRx has the sole power to direct the casting
pursuant to the Voting Agreements are equal to approximately 15.7% of the votes
that could be cast by the holders of all outstanding shares of Common and
Convertible Preferred voting together as a single class, based on the 10,338,768
shares of Common and 1,500,000 shares of Convertible Preferred issued and
outstanding on December 6, 1996.
CytRx expressly disclaims any beneficial ownership of the shares of Common
and Convertible Preferred subject to the Voting Agreements. CytRx has no sole
or shared power to dispose or to direct the disposition of any of the shares of
Common or Convertible Preferred subject to the Voting Agreements.
Other than as set forth in this Item 5, to the best of CytRx's knowledge (i)
neither CytRx nor any subsidiary or affiliate of CytRx or any of its or their
executive officers or directors, beneficially owns any shares of Common or
Convertible Preferred, and (ii) there have been no transactions in the shares of
Common or Convertible Preferred effected during the past 60 days by CytRx, nor
to the best of CytRx's knowledge, by any subsidiary or affiliate of CytRx or any
of its or their executive officers or directors.
The Voting Agreements, copies of which are attached to this filing and are
incorporated in this Item 5 by this reference, provide more detailed information
as to the nature of CytRx's interest in the securities of Zynaxis.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities to the Issuer.
Other than the agreements discussed above in Item 4, to the best of CytRx's
knowledge there are at present no contracts, arrangements, understandings or
relationships (legal or otherwise) among the persons named in Item 2 above and
between such persons and any person with respect to any securities of Zynaxis.
Item 7. Material to be Filed as Exhibits.
1. Supplement to Item 2.
(Page 5 of 83 Pages)
<PAGE> 6
2. Agreement and Plan of Merger and Contribution dated December 6, 1996 by and
among CytRx, Vaxcel, Vaxcel Merger Sub and Zynaxis (Filed as Exhibit 2.1 to
Report on Form 8-K filed by CytRx (Commission File No. 000-15327) on
December 6, 1996 and incorporated herein by reference)
3. Warrant Agreement.
4. Form of Proposed Amendment to Articles of Incorporation of Zynaxis.
5. Liquidation Agreement.
6. Note Exchange Agreement.
7. Preferred Stock and Warrant Agreement.
8. Shareholder Voting Agreements.
(Page 6 of 83 Pages)
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
CYTRX CORPORATION
Date: December 13, 1996 By: /s/ Mark W. Reynolds
Name: Mark W. ReynoldS
Title: Controller
Chief Financial Officer
(Page 7 of 83 Pages)
<PAGE> 8
INDEX TO EXHIBITS
Exhibit Description
1. Supplement to Item 2.
2. Agreement and Plan of Merger and Contribution dated December 6, 1996
by and among CytRx, Vaxcel, Vaxcel Merger Sub and Zynaxis (Filed as
Exhibit 2.1 to Report on Form 8-K filed by CytRx (Commission File No.
000-15327) on December 6, 1996 and incorporated herein by reference)
3. Warrant Agreement.
4. Form of Proposed Amendment to Articles of Incorporation of Zynaxis.
5. Liquidation Agreement.
6. Note Exchange Agreement.
7. Preferred Stock and Warrant Agreement.
8. Shareholder Voting Agreements.
(Page 8 of 83 Pages)
<PAGE> 1
EXHIBIT 1
Supplement to Item 2
<PAGE> 2
SUPPLEMENT TO ITEM 2
Name and residence Position with Principal employment and
or business address CytRx Corporation Principal business of employer
Jack J. Luchese Chairman of the Board Chairman of the Board,
CytRx Corporation President and Chief President and Chief Executive
154 Technology Parkway Executive Officer Officer, CytRx Corporation,
Norcross, Georgia 30092 the principal business of
which is the development and
commercialization of
pharmaceutical related
products and services
including human therapeutics.
Mark W. Reynolds Chief Financial Chief Financial Officer
CytRx Corporation Officer and Secretary and Secretary, CytRx
154 Technology Parkway Corporation
Norcross, Georgia 30092
William B. Fleck Vice President - Vice President - Human
CytRx Corporation Human Resources Resources, CytRx Corporation
154 Technology Parkway
Norcross, Georgia 30092
R. Martin Emanuele, Ph.D. Vice President - Vice President - Preclinical
CytRx Corporation Preclinical Research Research and Development,
154 Technology Parkway and Development CytRx Corporation
Norcross, Georgia 30092
Raymond C. Carnahan, Jr. Director Retired pharmaceutical
CytRx Corporation executive
154 Technology Parkway
Norcross, Georgia 30092
Herbert H. McDade, Jr. Director Chairman, President and CEO
CytRx Corporation of Access Pharmaceutical Co.,
154 Technology Parkway a biotechnology company
Norcross, Georgia 30092
Jack L. Bowman Director Retired pharmaceutical
CytRx Corporation executive
154 Technology Parkway
Norcross, Georgia 30092
Max Link, Ph.D. Director Retired pharmaceutical
CytRx Corporation executive
154 Technology Parkway
Norcross, Georgia 30092
<PAGE> 1
EXHIBIT 3
Warrant Agreement
<PAGE> 2
VAXCEL, INC.
SHARE WARRANT
NEITHER THIS WARRANT
NOR THE SHARES ISSUABLE UPON THE EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED
____________, 1997 Warrant to Purchase
Shares of Common Stock
WARRANT
For the Purchase of Shares of the Common Stock,
$0.001 Par Value, of Vaxcel, Inc.,
a Delaware Corporation
This is to certify that, for good and valuable consideration received, CytRx
Corporation, a Delaware corporation ("Investor"), or registered assigns, is
entitled to purchase from Vaxcel, Inc., a Delaware corporation (the "Company"),
a number of shares of common stock of the Company ("Common Stock") equal to:
(i) the amount that the Board of Directors of Investor reasonably determines is
the minimum amount that must be contributed to the capital of the Company in
order for the Company to satisfy or continue to satisfy quantitative
requirements for inclusion or continued inclusion of the Common Stock in the
Nasdaq Small Cap Market divided by (ii) one-half of the Per Share Price and
multiplied by (iii) the Exchange Ratio. This Warrant is subject to the terms
and conditions hereinafter set forth, including, without limitation, the terms
governing exercise of this Warrant set forth in Section 1 below. Unless
otherwise defined herein, capitalized terms that are not defined herein and that
are defined terms in the Agreement and Plan of Merger and Contribution dated
December 6, 1996 among Investor, the Company, Vaxcel Merger Subsidiary, Inc. and
Zynaxis, Inc. (the "Merger and Contribution Agreement") shall have the meanings
given such terms in the Merger and Contribution Agreement.
1. Exercise of Warrant.
1.1 Exercise Period.
Investor shall have the right to purchase shares of Common Stock
under the terms of this Warrant from the time that the Board of Directors of
Investor reasonably determines that the Company's total assets and capital and
surplus are insufficient to satisfy the total assets and capital and surplus
requirements for inclusion of the Common Stock in the Nasdaq Small Cap Market
until 5:00 p.m. Eastern time on the date that is one year after the date of this
Warrant.
1.2 Exercise Price.
The per share price for the shares which may be purchased upon the
exercise of this Warrant (the "Exercise Price") shall be initially equal to: (i)
one-half of the Per Share Price, divided by (ii) the Exchange Ratio, subject to
adjustment from time to time as provided in Section 1.3 hereof.
<PAGE> 3
1.3 Adjustment.
(a) Upon each adjustment of the Exercise Price, the holder of
this Warrant shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
shares purchasable pursuant hereto immediately prior to such adjustment and
dividing the product thereof by the exercise price resulting from such
adjustment, and rounding down to the nearest whole share.
(b) If the number of outstanding shares of Common Stock is
increased by a stock split, stock dividend, or other similar event, the exercise
price in effect immediately prior to such event shall be proportionately
reduced, and conversely, if the number of outstanding shares of Common Stock is
decreased by a combination or reclassification of shares, or other similar
event, the exercise price in effect immediately prior to such event shall be
proportionately increased.
(c) If the Company shall effect a reorganization, shall merge
with or consolidate into another corporation, or shall sell, transfer or
otherwise dispose of all or substantially all of its property, assets or
business and, pursuant to the terms of such reorganization, merger,
consolidation or disposition of assets, property or assets of the Company,
successor or transferee or an affiliate thereof or cash are to be received by or
distributed to the holders of Common Stock, then the holder of this Warrant
shall have the right thereafter to receive, upon the exercise of this Warrant,
the number of shares of stock or other securities, property or assets of the
Company, successor, transferee or affiliate thereof or cash receivable upon or
as a result of such reorganization, merger, consolidation or disposition of
assets by a holder of the number of shares of Common Stock equal to that to
which the holder of this Warrant upon the exercise thereof immediately prior to
such event would be entitled. The provisions of this paragraph shall similarly
apply to successive reorganizations, mergers, consolidations or dispositions of
assets. Upon any reorganization, consolidation, merger or transfer hereinabove
referred to, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities,
property, assets and cash receivable upon the exercise of this Warrant after the
consummation of such reorganization, consolidation, merger or transfer, as the
case may be. The Company shall not effect any such reorganization,
consolidation, merger or transfer, unless prior to the consummation thereof the
successor corporation (if other than the Company) resulting therefrom or the
corporation purchasing such assets shall, by written instrument executed and
mailed to the registered holder hereof at the last address of such holder
appearing on the books of the Company, (i) assume the obligation to deliver to
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to purchase, and (ii)
agree to be bound by all the terms of this Warrant.
1.4 Method of Exercise.
In order to exercise this Warrant, the registered owner hereof
shall present this Warrant to the Company at the office of the Company,
accompanied by written notice to the Company that the owner elects to exercise
this Warrant, in form attached hereto as Schedule A. Such notice shall also
state the name or names (with address) in which the certificate or certificates
for shares which shall be issuable on such exercise shall be issued. As soon as
practicable after the receipt of such notice, the presentation of this Warrant,
and the receipt by the Company of the full Exercise Price for such shares in
current U.S. funds, the Company shall issue and deliver to the owner a
certificate or certificates for the number of full shares which the owner seeks
the Company to issue upon that exercise of this Warrant.
<PAGE> 4
Such exercise shall be deemed to have been effected immediately
prior to the close of business on the date on which such notice shall have been
received by the Company and this Warrant shall have been presented as aforesaid,
and exercise shall be at the Exercise Price in effect at such time, and at such
time the rights of the owner of this Warrant as such owner shall cease with
respect to that number of shares, and the person or persons in whose name or
names any certificate or certificates for shares, shall be issuable upon such
exercise shall be deemed to have become the owner(s) of record of the shares
represented thereby.
1.5 Notice of Certain Actions.
In case at any time:
(1) the Company shall declare any discretionary dividend upon
any class of its capital stock payable in securities or make any special
dividend or other distribution;
(2) the Company shall offer for subscription pro rata to the
holders of any class of its capital stock any additional securities of any class
or other rights;
(3) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all of substantially all its assets or stock to,
another corporation;
(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(5) the Company shall enter into an agreement or adopt a plan
for the purpose of effecting a consolidation, merger, or sale of all or
substantially all of its assets or stock, other than a merger where the Company
is the surviving corporation and the terms of the Company's capital stock remain
unchanged; then, in any one or more of said cases, the Company shall give
written notice, by first class mail, postage prepaid, to the registered owner of
this Warrant, of the date on which (a) the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights, or
(b) such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up shall take place, as the case may be.
Such notice shall also specify the date as of which the owners of any class of
capital stock of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their capital stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up as the case may be. Such written notice shall be given at least 30
days prior to the action in question if practicable and not less than 30 days
prior to the record date or the date on which the Company's transfer books are
closed in respect thereto if practicable.
1.6 Reservation of Shares.
The Company will at all times reserve and keep available out of
its authorized shares of capital stock, solely for the purpose of issuance upon
the exercise of this Warrant as herein provided, such number of Common Shares as
shall then be issuable upon the exercise of this Warrant. The Company covenants
that all shares which shall be so issuable shall, upon the exercise of this
Warrant as herein provided, be duly and validly issued and fully paid and
nonassessable by the Company.
<PAGE> 5
1.7 Taxes.
The issuance of certificates for shares upon exercise of this
Warrant shall be made without charge to the owner of this Warrant for any
issuance tax in respect thereto, provided that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
registered owner of this Warrant.
1.8 Partial Exercise.
The purchase rights represented by this Warrant are exercisable at
the option of the registered owner hereof in whole at any time, or in part from
time to time, within the period above specified, provided, however, that such
purchase rights shall not be exercisable with respect to a fraction of a share.
In case of the purchase of less than all the shares purchasable under this
Warrant, the Company shall cancel this Warrant upon the surrender hereof and
shall execute and deliver a new Warrant of like tenor and date for the balance
of the shares purchasable hereunder.
2. Shareholder Rights. This Warrant shall not entitle the owner hereof to
any voting rights or other rights as a shareholder of the Company, or to any
other rights whatsoever except the rights herein expressly set forth, and no
dividends shall be payable or accrue in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until or unless, and
except to the extent that, this Warrant shall be exercised. No provision
hereof, in the absence of affirmative action by the owner hereof to exercise
this Warrant, and no mere enumeration herein of the rights or privileges of the
owner hereof, shall give rise to any liability of such owner for the exercise
price or as a shareholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
3. Exchange of Warrant. This Warrant is exchangeable upon the surrender
hereof by the registered owner to the Company for a reasonable number of new
Warrants issued to the registered owner of like tenor and date representing in
the aggregate the right to purchase the number of shares purchasable hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as shall be designated by the registered owner at the time of such
surrender.
4. Transfer. This Warrant and the shares which may be purchased by the
exercise of this Warrant have not been registered under the Securities Act of
1933, as amended, or any applicable state securities laws. By accepting this
Warrant, the owner or any successor or assignee of the owner who may hereafter
become the owner of this Warrant, hereby agrees to be bound by the provisions of
such statutes. Except as otherwise provided above, this Warrant and all rights
hereunder are transferable by the registered owner hereof in person or by duly
authorized attorney on the books of the Company upon surrender of this Warrant,
properly endorsed, to the Company.
5. Investment Representation and Legend. The owner of this Warrant, by
acceptance of this Warrant, represents and warrants to the Company that it is
acquiring this Warrant and the shares (or other securities) issuable upon the
exercise hereof for investment purposes only and not with a view towards the
resale or other distribution thereof and agrees that the Company may affix upon
this Warrant the following legend:
<PAGE> 6
"Neither this Warrant nor the shares issuable upon exercise of this
Warrant have been registered under the Securities Act of 1933, as
amended."
The owner of this Warrant, by acceptance of this Warrant, further agrees that
the Company may affix the following legend (in addition to any other legend(s),
if any, required by applicable state securities laws) to certificates for shares
(or other securities) issued upon exercise of this Warrant ("Warrant Shares"):
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933, as amended. None of such shares may be offered, sold or
transferred in the absence of such registration or an exemption
therefrom."
6. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to
indemnification or otherwise as it may in its discretion 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 a
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
7. Presentment. Prior to due presentment for registration of transfer of
this Warrant, the Company may deem and treat the registered owner hereof as the
absolute owner of this Warrant, notwithstanding any notation of ownership or
other writing thereon, for the purpose of any exercise thereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
8. Notice. Notice or demand pursuant to this Warrant shall be sufficiently
given or made, if sent by first-class mail, postage prepaid, addressed, if to
the owner of this Warrant, to such owner at its last known address as it shall
appear in the records of the Company, and if to the Company, at Vaxcel, Inc.,
154 Technology Parkway, Norcross, Georgia 30092, Attention: President. The
Company may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provision of this
Section 8 for the giving of notice.
9. Governing Law. The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of Delaware.
10. Successors, Assigns. All the terms and provisions of this Warrant shall
be binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
<PAGE> 7
IN WITNESS WHEREOF, the Company has created this Warrant to be executed by the
signatures of its duly authorized officers and the corporate seal hereunto
affixed.
VAXCEL, INC.
By:
Paul J. Wilson, III
President and Chief Executive Officer
[CORPORATE SEAL]
<PAGE> 8
SCHEDULE A TO WARRANT
Vaxcel, Inc.
154 Technology Parkway
Norcross, Georgia 30092
Attention: Paul J. Wilson, III
Re: Warrant dated as of ___________, 1997, issued to CytRx
Corporation (the "Warrant")
Gentlemen:
We hereby exercise the Warrant for _____________ shares of Common Stock, $0.001
par value, at the current exercise price of $___________ per share.
Certificates for such shares should be issued in the name of CytRx Corporation.
Enclosed is a check in the aggregate amount of $___________.
----------------------
Holder
Dated:
---------------
<PAGE> 1
EXHIBIT 4
Form of Proposed Amendment to Articles of Incorporation
<PAGE> 2
Microfilm Number ____________ Filed with the Department of State on _________
Entity Number ___________ _____________________________
Secretary of the Commonwealth
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB:15-1915 (Rev 91)
In compliance with the requirements of 15 Pa.C.S. Sec. 1915 (relating to
articles of amendment), the undersigned business corporation, desiring to amend
its Articles, hereby states that:
1. The name of the corporation is: Zynaxis, Inc.
2. The (a) address of this corporation's current registered office in this
Commonwealth or (b) name of its commercial registered office provider and
the county of venue is (the Department is hereby authorized to correct the
following information to conform to the records of the Department):
(a) 371 Phoenixville Pike Malvern Pennsylvania 19355 Chester
Number and Street City State Zip County
(b) c/o:
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider, the
county in (b) shall be deemed the county in which the corporation is located for
venue and official publication purposes.
3. The statute by or under which it was incorporated is: The Pennsylvania
Business Corporation Law of 1988, as amended
4. The date of its incorporation is: March 5, 1987
5. (Check, and if appropriate complete, one of the following):
X The amendment shall be effective upon filing these Articles of
Amendment in the Department of State.
__ The amendment shall be effective on: __________ at __________
Date Hour
6. (Check one of the following):
X The amendment was adopted by the shareholders (or members) pursuant to
15 Pa.C.S. Sec. 1914(a) and (b).
__ The amendment was adopted by the board of directors pursuant to 15
Pa.C.S. Sec. 1914(c).
7. (Check, and if appropriate complete, one of the following):
__ The amendment adopted by the corporation, set forth in full, is as
follows:
X The amendment adopted by the corporation is set forth in full in
Exhibit A attached hereto and made a part hereof.
<PAGE> 3
8. (Check if the amendment restates the Articles):
__ The restated Articles of Incorporation supersede the original Articles
and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer thereof this
____ day of ______________, 19__.
Zynaxis, Inc.
(Name of Corporation)
By:
---------------
Title:
--------------
<PAGE> 4
EXHIBIT A
ARTICLES OF AMENDMENT
OF
ZYNAXIS, INC.
The Amended and Restated Articles of Incorporation of Zynaxis, Inc., as
amended, are amended to add a new Article 8 to read as follows:
"8. Subchapter E of Chapter 25 of the Business Corporation Law of 1988, as
amended, as codified at 15 Pa.C.S. Sec. 2541-2548, shall not be applicable
to the corporation."
<PAGE> 1
EXHIBIT 5
Liquidation Agreement
<PAGE> 2
December 6, 1996
Mr. Martyn D. Greenacre
Chairman and CEO
Zynaxis, Inc.
371 Phoenixville Pike
Malvern, PA 19355
Dear Martyn:
We understand that the Board of Directors of Zynaxis (the "Company") has
approved the sale of the assets listed in Exhibit A attached hereto (the
"Assets") for prices no less than the values indicated for such assets on
Exhibit A and the settlement of the liabilities listed in Exhibit B attached
hereto (the "Liabilities") for amounts no greater than the amounts indicated on
Exhibit B (collectively, the "Transactions"). We further understand that the
Board of Directors (and any applicable committees thereof) of Zynaxis have
approved: (i) the operating budget attached as Exhibit C for the period between
the date of this letter and the closing of the proposed business combination
transaction between the Company and CytRx Corporation, (ii) the agreements to be
entered into by the Company and CytRx Corporation with Martyn D. Greenacre and
Michael A. Christie attached as Exhibit D and Exhibit E, respectively, and (iii)
the agreement between QED and Zynaxis covering QED's relationship as Zynaxis's
agent for the sale of the Cauldron Division attached as Exhibit F.
1. The Company will exert its commercially reasonable best efforts to sell the
Assets and to cooperate with CytRx Corporation in its efforts to assist you in
selling the Assets. The Company shall approve and execute documents evidencing
and perform any agreement negotiated by the Company or us with any prospective
purchaser of any Asset if (a) the purchase price is no lower than the amount and
is consistent with the terms set forth for such Asset in Exhibit A, and (b) the
other terms and conditions of the Transaction are not less favorable to the
Company in any material respect than the terms and conditions of similar
transactions.
2. The Company will exert its commercially reasonable best efforts to settle
the Liabilities and to cooperate with CytRx Corporation in its efforts to
assist you in settling the Liabilities. The Company shall approve and execute
documents evidencing and perform any agreement negotiated by the Company or us
with any creditor for any Liability, if (a) the cash payment required to be paid
by the Company to such creditor is no greater than the settlement amount and is
consistent with the terms set forth for such Liability in Exhibit B, and (b) the
other terms and conditions of the Transaction are not less favorable to the
Company in any material respect than the terms and conditions of similar
transactions.
3. Subject to approval by the Committee (as defined below), which approval
shall not be unreasonably withheld, the Company shall approve and execute
documents evidencing and perform any agreement negotiated by us with any
counsel, accountants, appraisers, brokers and other advisors in connection with
the Transactions (all for the account of the Company), if (a) such person is not
an affiliate of ours, and (b) the terms and conditions of such agreement, taken
as a whole, are fair to the Company.
4. In connection with our activities on your behalf, the Company agrees to
cooperate with us, to furnish or cause to be furnished to us such information
and data as we may reasonably request, and to give us reasonable access to the
Company's officers, directors, employees, appraisers and independent
accountants. The Company represents that all information made available to us
by the Company will be complete and correct in all material respects and will
not contain any untrue statement of a material fact or omit to state a
<PAGE> 3
material fact necessary in order to make the statements therein not misleading
in light of the circumstances under which such statements are made.
5. The Board of Directors of the Company (the "Board") shall establish a
committee (the "Committee") of the Board consisting of John Chappell, Stephen
Reidy and Martyn Greenacre, which shall have full authority of the Board to
authorize the Transactions and the institution and prosecution of actions
(including arbitration proceedings) relating to the Transactions. The Committee
shall confer with us at such times as we reasonably request.
6. The Company shall reimburse us promptly for all reasonable out-of-pocket
expenses, including reasonable fees and expenses of our counsel, incurred in
connection with the rendering of our services hereunder.
7. The benefits of this Agreement shall inure to the respective successors and
assigns of the parties hereto and of the Indemnified Persons referred to in the
attached indemnification provisions, and the obligations and liabilities assumed
in this Agreement by the parties hereto shall be binding upon their respective
successors and assigns.
8. The Company agrees to indemnify us in accordance with the indemnification
provisions attached as Exhibit G hereto, which are incorporated herein by
reference and made a part hereof.
9. We may terminate this Agreement at any time upon written notice, without
liability or continuing obligation to you. The Company may not terminate this
Agreement unless and until the Agreement and Plan of Merger and Contribution
dated as of the date hereof between us and the Company is terminated. Neither
termination nor completion of this assignment shall affect the provisions of
paragraphs 6 and 8, which shall remain operative and in full force and effect
until 5:00 p.m. Eastern time on the third anniversary of the execution of this
Agreement.
10. The validity and interpretation of this Agreement shall be governed by, and
construed and enforced in accordance with, the substantive laws of the State of
Delaware applicable to agreements made and to be fully performed therein. This
agreement may not be modified or amended except in writing signed by the parties
hereto. Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties hereto or their respective successors,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement. The parties acknowledge that this Agreement is not to be construed
as creating a partnership or joint venture between the parties hereto.
[Signatures begin on the next page.]
<PAGE> 4
If the above terms are in accordance with our understanding, please sign the
enclosed copy of this letter and return it to us.
Very truly yours,
CYTRX CORPORATION
By: /s/ Jack J. Luchese
Jack J. Luchese
President and
Chief Executive Officer
Confirmed and Agreed to this
6th day of December, 1996:
ZYNAXIS, INC.
By: /s/ Martyn D. Greenacre
Martyn D. Greenacre
Chairman and Chief Executive Officer
<PAGE> 1
EXHIBIT 6
Note Exchange Agreement
<PAGE> 2
NOTE EXCHANGE AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of December 6,
1996, by and among ZYNAXIS, INC., a Pennsylvania corporation (the "Company"),
CYTRX CORPORATION, a Delaware corporation ("CytRx"), VAXCEL, INC., a Delaware
corporation and a wholly owned subsidiary of CytRx ("Vaxcel"), EUCLID PARTNERS
III, L.P., a Delaware limited partnership, and S.R. ONE, LTD., a Delaware
limited partnership (together with Euclid Partners III, L.P., the
"Noteholders").
WITNESSETH:
WHEREAS, the Noteholders hold certain convertible promissory notes on which
the Company is the obligor.
WHEREAS, simultaneously with the execution of this Agreement the Company is
entering into an Agreement and Plan of Merger and Contribution (the "Agreement
and Plan of Merger and Contribution") with CytRx, Vaxcel, and Vaxcel Merger Sub,
Inc., a Georgia corporation and a newly formed, wholly owned subsidiary of
Vaxcel ("Vaxcel Merger Sub"), and certain other agreements, including, among
other things, a Liquidation Agreement (the "Liquidation Agreement")
contemplating the sale of Assets (as defined therein) of the Company and
documents (the "Secured Loan Documents") relating to a secured loan being
extended to the Company by CytRx (the "Secured Loan"). The Agreement and Plan
of Merger and Contribution provides for the issuance of shares of common stock
of Vaxcel and a warrant to purchase shares of common stock of Vaxcel to CytRx in
exchange for CytRx's contribution of the Secured Loan and cash in an amount
equal to Four Million Dollars ($4,000,000) minus the balance of the Secured Loan
at the time of contribution, subject to adjustment for payments made to
shareholders of Zynaxis pursuant to Section 3.3 of the Agreement and Plan of
Merger and Contribution. The Agreement and Plan of Merger and Contribution also
provides for the issuance of shares of common stock of Vaxcel to the existing
shareholders of the Company in exchange for the contribution to Vaxcel by the
existing shareholders of the Company of all of the outstanding shares of capital
stock of the Company by means of a merger of Vaxcel Merger Sub with and into the
Company (the "Merger"). At the effective time of the Merger, the outstanding
shares of the capital stock of the Company will be converted into the right to
receive shares of the common stock of Vaxcel. As a result, shareholders of the
Company will become shareholders of Vaxcel and the Company will continue to
conduct its business and operations as a wholly owned subsidiary of Vaxcel.
WHEREAS, CytRx is unwilling to enter into the Agreement and Plan of Merger
and Contribution unless the Noteholders agree to exchange their promissory notes
for shares of common stock of Vaxcel upon the terms set forth in this Agreement
in connection with the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants, and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Agreement to Exchange. Upon consummation of the Merger, each
convertible demand promissory note issued by the Company and held by a
Noteholder (each a "Company Demand Note") shall be exchanged for the number of
shares (the "Note Shares") of Vaxcel Common Stock equal to the Exchange Ratio
multiplied by the quotient (rounded down to the nearest whole share) obtained by
dividing the unpaid principal amount of such Company Demand Note, together with
unpaid interest thereon accrued through September 30, 1996, by the Per Share
Price, as such term is defined in the Agreement and Plan of Merger and
Contribution. At the closing of the transactions contemplated by the Agreement
and Plan of
<PAGE> 3
Merger and Contribution (the "Closing") each holder of a Company Demand Note
shall deliver to the Company the Company Demand Note, marked "Paid in Full," and
Vaxcel shall deliver to each such holder in exchange therefor a certificate
representing all the Note Shares to be issued in exchange therefor, duly
registered in the name of such holder, free and clear of any liens, security
interests or other defects of title.
2. Termination of Registration Rights. Each of the undersigned
Noteholders agrees that: (i) upon execution of this Agreement all rights that
the Noteholder may have to require the Company to register securities of the
Company for sale under applicable state and federal securities laws
("Registration Rights") are suspended pending the Closing, and (ii) upon
consummation of the Merger all such Registration Rights will be terminated and
such Noteholder will have such registration rights as are provided for such
Noteholder in the Agreement and Plan of Merger and Contribution. If the
Agreement and Plan of Merger and Contribution is terminated for any reason,
beginning at the time of such termination the undersigned Noteholder shall have
such Registration Rights as such Noteholder would have had at such time if such
Registration Rights had not been suspended pursuant to the preceding sentence.
3. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to the Company, CytRx
or Vaxcel, to the address set forth in Section 11.8 of the Agreement and Plan of
Merger and Contribution; and (ii) if to a Noteholder, to its address shown below
its signature on the last page hereof.
4. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
5. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
6. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
7. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
8. Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties. Any assignment in violation of the foregoing
shall be void.
9. Equitable Remedies. Each Noteholder agrees that irreparable damage
would occur and that CytRx, Vaxcel and the Company would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that CytRx, Vaxcel and the Company shall be entitled to an
injunction or injunctions to prevent breaches by a Noteholder of this Agreement
and to enforce specifically the terms and provisions of this Agreement.
<PAGE> 4
10. Severability. If any term, provision, covenant or restriction
herein, or the application thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions herein and
the application thereof to any other circumstances, shall remain in full force
and effect, shall not in any way be affected, impaired or invalidated, and shall
be enforced to the fullest extent permitted by law.
[Remainder of page intentionally left blank.]
<PAGE> 5
[Signature Page to Note Exchange Agreement]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under
seal as of the day and year first above written.
ZYNAXIS, INC. CYTRX CORPORATION
By: /s/ Martyn D. Greenacre By: /s/ Jack J. Luchese
Name: Martyn D. Greenacre Name: Jack J. Luchese
Title: Chairman, President and CEO Title: Chairman, President and CEO
VAXCEL, INC.
By: /s/ Paul J. Wilson
Name: Paul J. Wilson
Title: President and CEO
EUCLID PARTNERS III, L.P. S.R. ONE, LTD.
By: /s/ Stephen K. Reidy By: /s/ Brenda D. Gavin
Name: Stephen K. Reidy Name: Brenda D. Gavin
Title: General Partner of Title: Vice President
Euclid Associates III, L.P.,
General Partner of Euclid
Partners III, L.P.
Address: Address: 565 E. Swedesford Rd.
No. 315
Wayne, PA 19087
<PAGE> 1
EXHIBIT 7
Preferred Stock and Warrant Agreement
<PAGE> 2
PREFERRED STOCK AND WARRANT AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of December 6,
1996, by and among ZYNAXIS, INC., a Pennsylvania corporation ("Zynaxis"), CYTRX
CORPORATION, a Delaware corporation ("CytRx"), Vaxcel, Inc., a Delaware
corporation and a wholly owned subsidiary of CytRx ("Vaxcel") and the persons
listed in Exhibit A (the "Securityholders").
WITNESSETH:
WHEREAS, the Securityholders collectively hold all of the outstanding shares
of Series A Convertible Preferred Stock of Zynaxis (the "Series A Stock") and
each Securityholder holds the number of shares of Series A Stock and the number
of warrants to purchase additional shares of Common Stock of Zynaxis set forth
beside such Securityholder's name in Exhibit A (the "Warrants");
WHEREAS, the Series A Stock and the Warrants were issued pursuant to that
certain Preferred Stock and Warrant Purchase Agreement dated March 29, 1995, as
amended (the "Preferred Stock and Warrant Purchase Agreement"), and in
connection with bridge loans extended by certain of the Securityholders to
Zynaxis;
WHEREAS, simultaneously with the execution of this Agreement Zynaxis is
entering into an Agreement and Plan of Merger and Contribution (the "Merger and
Contribution Agreement") with CytRx, Vaxcel, and Vaxcel Merger Sub, Inc., a
Georgia corporation and a newly formed, wholly owned subsidiary of Vaxcel
("Vaxcel Merger Sub"), and certain other agreements, including, among other
things, a Liquidation Agreement (the "Liquidation Agreement") contemplating the
sale of Assets (as defined therein) of Zynaxis and documents (the "Secured Loan
Documents") relating to a secured loan being extended to Zynaxis by CytRx (the
"Secured Loan"). The Merger and Contribution Agreement provides for the
issuance of shares of Vaxcel Common Stock and a warrant to purchase shares of
Vaxcel Common Stock to CytRx in exchange for CytRx's contribution to Vaxcel of
the Secured Loan and a cash payment in an amount equal to Four Million Dollars
($4,000,000) minus the aggregate principal and interest balance outstanding
under the Secured Loan, subject to adjustment for payments made to shareholders
of Zynaxis pursuant to Section 3.3 of the Merger and Contribution Agreement.
The Merger and Contribution Agreement also provides for the issuance of shares
of Vaxcel Common Stock to the existing shareholders of Zynaxis in exchange for
the contribution to Vaxcel by the existing shareholders of Zynaxis of all of the
outstanding shares of capital stock of Zynaxis by means of a merger of Vaxcel
Merger Sub with and into Zynaxis. At the effective time of such merger, the
outstanding shares of the capital stock of Zynaxis will be converted into the
right to receive shares of the common stock of Vaxcel (except as provided
herein). As a result, shareholders of Zynaxis will become shareholders of
Vaxcel and Zynaxis will continue to conduct its business and operations as a
wholly owned subsidiary of Vaxcel.
WHEREAS, CytRx is unwilling to enter into the Merger and Contribution
Agreement unless the rights of the Securityholders are modified as set forth in
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants, and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Treatment of Transactions. Each of the undersigned elects that the
consummation of the transactions contemplated by the Merger and Contribution
Agreement and the other agreements contemplated by the Merger and Contribution
Agreement, including but not limited to the Liquidation
<PAGE> 3
Agreement, will not be deemed a liquidation for purposes of Sections 3.1 and 3.2
of the Statement with Respect to Shares filed by Zynaxis in the Department of
State of the Commonwealth of Pennsylvania on April 6, 1995.
2. Consent to Secured Loan. Each of the undersigned consents to the
Secured Loan and all liens, pledges, mortgages, security interests and other
encumbrances to which the assets or properties of Zynaxis may become subject as
part of the Secured Loan.
3. Exchange of Warrants. Each of the undersigned agrees that upon
consummation of the merger between Zynaxis and Vaxcel Merger Sub pursuant to the
Merger and Contribution Agreement (the "Merger"), each Warrant held by the
undersigned shall be exchanged for a new warrant substantially in the form
attached hereto as Exhibit B to purchase a number of shares of Vaxcel Common
Stock equal to: (i) the number of shares of Common Stock of Zynaxis as the
Warrants held by such undersigned are exercisable to purchase at that time
multiplied by (ii) the Exchange Ratio (the "New Warrant"). Each of the
undersigned Securityholders agrees that such undersigned Securityholder shall
surrender the Warrants held by such undersigned Securityholder and shall receive
in exchange therefor a New Warrant. Zynaxis shall not honor any warrant
agreement representing a Warrant after the Merger.
4. Termination of Preferred Stock and Warrant Purchase Agreement and
Registration Rights. Each of the undersigned agrees that the Preferred Stock
and Warrant Purchase Agreement and all rights of the Securityholders thereunder
shall terminate upon the Merger. Each of the undersigned further agrees that:
(i) upon execution of this Agreement all rights that the undersigned
Securityholder may have to require Zynaxis to register securities of Zynaxis for
sale under applicable state and federal securities laws, whether granted
pursuant to the Preferred Stock and Warrant Agreement or otherwise
("Registration Rights"), are suspended pending the Merger, and (ii) upon
occurrence of the Merger all such Registration Rights will be terminated and
such Securityholder will have such Registration Rights as are provided for such
Securityholder in the Merger and Contribution Agreement. If the Merger and
Contribution Agreement is terminated for any reason, beginning at the time of
such termination the undersigned Securityholder shall have such Registration
Rights as such Securityholder would have had at such time if such Registration
Rights had not been suspended pursuant to the preceding sentence.
5. Accredited Investor Status of Securityholder. Each of the
undersigned Securityholders represents and warrants to CytRx, Vaxcel and Zynaxis
that he or it is an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
and that he or it is acquiring New Warrants for himself or itself and not for
other persons. Each Securityholder understands that the New Warrants and any
Securities purchased upon exercise of New Warrants (the "Warrant Securities")
have not been registered under the Securities Act and, therefore, cannot be
resold unless such Warrant Securities are registered under the Securities Act or
unless an exemption from such registration is available.
6. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to Zynaxis, CytRx or
Vaxcel, to the address set forth in Section 11.8 of the Merger and Contribution
Agreement; and (ii) if to a Securityholder, to its address shown below its
signature on the last page hereof.
7. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
<PAGE> 4
8. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
9. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
10. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
11. Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties. Any assignment in violation of the foregoing
shall be void.
12. Equitable Remedies. Each Securityholder agrees that irreparable
damage would occur and that CytRx and Vaxcel would not have any adequate remedy
at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that CytRx and Vaxcel shall be entitled to an injunction
or injunctions to prevent breaches by a Securityholder of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
13. Severability. If any term, provision, covenant or restriction
herein, or the application thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions herein and
the application thereof to any other circumstances, shall remain in full force
and effect, shall not in any way be affected, impaired or invalidated, and shall
be enforced to the fullest extent permitted by law.
14. Defined Terms. Capitalized terms used in this Agreement but not
defined herein shall have the meanings given such terms in the Merger and
Contribution Agreement.
[Remainder of page intentionally left blank.]
<PAGE> 5
[First of Three Signature Pages to Preferred Stock and Warrant Agreement dated
November _, 1996]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under
seal as of the day and year first above written.
ZYNAXIS, INC. CYTRX CORPORATION
By: /s/ Martyn D. Greenacre By: /s/ Jack J. Luchese
Name: Martyn D. Greenacre Name: Jack J. Luchese
Title: Chairman, President and CEO Title: Chairman, President and CEO
VAXCEL, INC. S.R. ONE, LTD.
By: /s/ Paul J. Wilson By: /s/ Brenda D. Gavin
Name: Paul J. Wilson Name: Brenda D. Gavin
Title: President and CEO Title: Vice President
Address: 565 E. Swedesford Road
No. 315
Wayne, PA 19087
EUCLID PARTNERS III, L.P. ALPHI FUND L.P.
By: /s/ Stephen K. Reidy By: Alphi Investment Management
Company, General Partner
Name: Stephen K. Reidy By: /s/ Philip R. Smith
Title: General Partner of Name: Philip R. Smith
Euclid Associates III, L.P., Title: President
General Partner
Address: Euclid Partners Corp. Address: 155 Pfingsten Road
50 Rockefeller Plaza Suite 360
New York, New York 10020 Deerfield, IL 60015
JAVELIN CAPITAL FUND, L.P.
By: /s/ Lyle A. Hohnke
Name: Lyle A. Hohnke
Title: General Partner
Address: 1075 13th Street South
Birmingham, AL 35294
<PAGE> 6
[Second of Three Signature Pages to Preferred Stock and Warrant Agreement dated
November _, 1996]
SENMED MEDICAL VENTURES CIP CAPITAL L.P.
By: CIP Capital Management Inc.,
General Partner
By: /s/ Vincent M. Paglino By: /s/ Joseph M. Corr
Name: Vincent M. Paglino Name: Joseph M. Corr
Title: Vice President, Title: President
Business Development
Address: 4445 Lake Forest Drive, Address: 20 Valley Stream Parkway
#600 Suite 265
Cincinnati, OH 45242 Malvern, PA 19355
THE WEST COMPANY WILLIAM M. SPENCER, III
By: /s/ Donald E. Morel Jr. Ph.D. By: /s/ William M. Spencer, III
Name: Donald E. Morel Jr. Ph.D. Name:
Title: Corporate V.P. - Title:
Scientific Services
Address: 101 Gordon Drive Address:
Lionville PA 19341
BIOTECHNOLOGY VENTURE COMMONWEALTH VENTURE
FUND S.A. PARTNERS I, L.P.
By: /s/ M.-Rose DOCK /s/ Fernand HEIM By: /s/ Charles A. Burton
Name: M.-Rose DOCK Fernand HEIM Name: Charles A. Burton
Title: Liquidator Mandatory Title: General Partner
Address: 231 Val des Bons-Malades Address: Philadelphia Ventures
L - 2121 LUXEMBOURG The Belleveu
200 S. Broad Street
8th Floor
Philadelphia, PA 19102
<PAGE> 7
[Third of Three Signature Pages to Preferred Stock and Warrant Agreement dated
November _, 1996]
PLEXUS VENTURES, INC. PHILADELPHIA VENTURES - JAPAN I, L.P.
By: /s/ John F. Chappell By: /s/ Charles A. Burton
Name: John F. Chappell Name: Charles A. Burton
Title: President Title: General Partner
Address: 1787 Sentry Parkway West Address: Philadelphia Ventures
Building 18, Suite 301 The Bellevue
Blue Bell, PA 19422 200 S. Broad Street
8th Floor
Philadelphia, PA 19102
GROTECH PARTNERS II, L.P. GROTECH PARTNERS III, L.P.
GROTECH III COMPANION FUND, L.P.
By: Mid Atlantic Ventures II, L.P., GROTECH III PENNSYLVANIA FUND, L.P.
General Partner
By: Grotech Capital Group, Inc.,
By: Grotech Capital Group, Inc., General Partner
General Partner
By: /s/ Matthew D. Brunnen By: /s/ Matthew D. Brunnen
Name: Matthew D. Brunnen Name: Matthew D. Brunnen
Title: Treasurer Title: Treasurer
Address: 9690 Deereco Rd. Address: 9690 Deereco Rd.
Timonium, MD 21093 Timonium, MD 21093
/s/ Gus G. Casten, M.D.
Dr. Gus G. Casten
Address: 238 Meadowcroft Circle
Birmingham, Alabama 35242
<PAGE> 8
EXHIBIT A
HOLDERS OF PREFERRED STOCK AND WARRANTS ISSUED BY ZYNAXIS, INC.
Series A
Name Shares Warrants
Euclid Partners III, L.P. 260,000 680,775
S.R. One, Ltd. 257,500 540,000
Javelin Capital Fund, L.P. 250,000 500,000
Alphi Fund L.P. 150,000 300,000
Senmed Medical Ventures 135,000 270,000
The West Company 125,000 250,000
William M. Spencer, III 55,000 110,000
Biotechnology Venture Fund S.A. 50,000 100,000
CIP Capital L.P. 45,000 265,000
Grotech Partners III, L.P. 26,490 52,980
Plexus Ventures, Inc. 25,000 150,000
Dr. Gus G. Casten 12,500 25,000
Commonwealth Venture Partners I, L.P. 10,000 20,000
Grotech Partners II, L.P. 3,455 6,910
Grotech III Companion Fund, L.P. 3,155 6,310
Philadelphia Ventures - Japan I, L.P 2,500 5,000
Grotech III Pennsylvania Fund, L.P. 1,900 3,800
Totals 1,412,500 3,285,775
<PAGE> 9
EXHIBIT B
THE WARRANTS REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE WARRANTS MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
THE WARRANTS REPRESENTED HEREBY AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE
WARRANTS REPRESENTED HEREBY (INCLUDING ANY HOLDERS) ARE BOUND BY THE TERMS OF A
PREFERRED STOCK AND WARRANT AGREEMENT DATED DECEMBER 6, 1996 AMONG ZYNAXIS,
INC., A PENNSYLVANIA CORPORATION, CYTRX CORPORATION, A DELAWARE CORPORATION,
VAXCEL, INC., A DELAWARE CORPORATION, AND THE HOLDERS OF SHARES OF SERIES A
CONVERTIBLE PREFERRED STOCK OF ZYNAXIS, INC. (THE "PREFERRED STOCK AND WARRANT
AGREEMENT") (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
Void after 5:00 p.m. (Eastern Standard Time), on the last
day of the Warrant Term, as provided herein.
Date: ____________, 1996 Warrant to
Purchase __________
Shares of Common Stock
WARRANT
TO PURCHASE COMMON STOCK OF
VAXCEL, INC.
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ______________ or such person's
registered assigns (herein called "Warrant Holder"), is the holder of a warrant
(this "Warrant") to purchase, subject to the provisions of this Warrant, from
Vaxcel, Inc., a Delaware corporation (the "Company"), at any time and from time
to time during the Warrant Term, _______ fully paid, validly issued and
nonassessable shares of Common Stock, par value $.001 per share, of the Company
("Common Stock"), at the Warrant Price. The Warrant Price and number and kind
of securities issuable hereunder are subject to adjustment as provided herein.
1. Definitions. For the purpose of this Warrant:
(a) "Additional Shares of Capital Stock" means all shares of capital
stock issued by the Company, except shares of capital stock of the Company
issued and outstanding at the time of issuance of this Warrant or expressly
authorized to be issued in the future pursuant to any contract, option, warrant
or benefit or compensation plan in existence and/or outstanding at the time of
issuance of this Warrant.
<PAGE> 10
(b) "Capital Stock" means the Company's Common Stock, and any other
stock of any class, whether now or hereafter authorized, which has the right to
participate in the distribution of earnings and assets of the Company without
limit as to amount or percentage.
(c) "Merger and Contribution Agreement" means that certain Agreement
and Plan of Merger and Contribution entered into by and among CytRx
Corporation, a Delaware corporation, the Company, Vaxcel Merger Subsidiary,
Inc., a Georgia corporation, and Zynaxis, Inc., a Pennsylvania corporation.
(d) "Per Share Price" means the Per Share Price as defined in the
Merger and Contribution Agreement.
(e) "Warrants" mean the warrants to purchase Common Stock of the
Company issued by the Company pursuant to the Preferred Stock and Warrant
Agreement and any and all warrants which are issued in exchange or substitution
for any outstanding Warrant pursuant to the terms of that Warrant.
(f) "Warrant Price" means the price per share at which shares of
Common Stock are purchasable hereunder, as such price may be adjusted from time
to time hereunder. The Warrant Price shall initially be equal to: (i) the Per
Share Price divided by (ii) the Exchange Ratio, and beginning at 5:00 p.m.
Eastern Time on the sixtieth (60th) day following the Closing Date, as such term
is defined in the Merger and Contribution Agreement, shall be equal to two (2)
times the Warrant Price in effect immediately prior to such time.
(g) "Warrant Shares" mean shares of Common Stock or other securities
purchased upon exercise of this Warrant.
(h) "Warrant Term" means a period of one year commencing on the
Closing Date and ending at 5:00 p.m. Eastern Time on the first anniversary of
the Closing Date, as such term is defined in the Merger and Contribution
Agreement.
2. Exercise of Warrants. This Warrant may be exercised during the Warrant
Term in whole or in part by the surrender of the Warrant, with the purchase
agreement attached hereto as Exhibit A properly completed and executed, at the
principal office of the Company at 154 Technology Parkway, Norcross, Georgia
30092 or such other location which shall at that time be the principal office of
the Company (the "Principal Office"), and upon payment to it by certified check
or bank draft to the order of the Company for the purchase price for the shares
to be purchased upon such exercise. The persons entitled to the shares so
purchased shall be treated for all purposes as the holders of such shares as of
the close of business on the date of exercise and certificates for the shares of
stock so purchased shall be delivered to the persons so entitled within a
reasonable time, not exceeding thirty (30) days, after such exercise. Unless
this Warrant has expired, a new Warrant of like tenor and for such number of
shares as the holder of this Warrant shall direct, representing in the aggregate
the right to purchase a number of shares with respect to which this Warrant
shall not have been exercised, shall also be issued to the holder of this
Warrant within such time.
3. Exchange. This Warrant is exchangeable from the date hereof until the
expiration of the Warrant Term, upon the surrender thereof by the holder thereof
at the Principal Office, for new
<PAGE> 11
Warrants of like tenor registered in such holder's name and representing in the
aggregate the right to purchase the number of shares purchasable under the
Warrant being exchanged, each of such new Warrants to represent the right to
subscribe for and purchase such number of shares as shall be designated by said
holder at the time of such surrender.
4. Transfer. The transferability of this Warrant and the Warrant Shares
are subject to the restrictions on transfer set forth below:
(a) Registration Restrictions. This Warrant and any Warrant Shares
that may be issued upon exercise thereof have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to the exemption provided in Section 4(2) thereof, and
have not been registered under state securities laws by reason of their issuance
in a transaction exempt from such registration requirements. This Warrant and
such Warrant Shares may not be sold, transferred or otherwise disposed of unless
registered under the Securities Act and applicable state securities laws (the
Company being under no obligation so to register such Warrant or Warrant Shares
except as set forth in the Merger and Contribution Agreement) or exempted from
such registration. Warrant Shares issuable upon exercise of this Warrant will
bear a legend to this effect. The restrictions contained herein shall be
binding on any transferee of this Warrant and the Company may require any such
transferee to execute an instrument agreeing in writing to be so bound by these
restrictions as a condition to transfer.
(b) Notice of Transfer and Opinion of Counsel. Warrant Holder agrees
that, prior to any transfer of this Warrant, such holder will give written
notice to the Company of such holder's intention to effect such transfer and to
comply in all other respects with the provisions of this Section 4. Each such
notice shall contain (i) a statement setting forth the intention of such
holder's prospective transferee with respect to its retention or disposition of
this Warrant, and (ii) unless waived by the Company, an opinion of counsel for
such holder (who may be the inside or staff counsel employed by such holder), as
to the necessity or non-necessity for registration under the Securities Act and
applicable state securities laws in connection with such transfer and stating
the factual and statutory bases relied upon by counsel. The following
provisions shall then apply:
(A) If in the opinion of counsel for the Company the proposed
transfer of this Warrant may be effected without registration or qualification
under the Securities Act and any applicable state securities laws, then the
registered holder of this Warrant shall be entitled to transfer this Warrant in
accordance with the intended method of disposition specified in the statement
delivered by such holder to the Company.
(B) If in the opinion of counsel for the Company the proposed
transfer of this Warrant may not be effected without registration under the
Securities Act or registration or qualification under any applicable state
securities laws, the registered holder of this Warrant shall not be entitled to
transfer this Warrant until the requisite registration or qualification is
effective.
(c) Transfer. Subject to the restrictions on transfer set forth in
this Section 4 and in Section 11 hereof, this Warrant is transferable, in whole
or in part, at the Principal Office by the registered holder thereof, in person
or by duly authorized attorney, upon presentation of this Warrant, properly
endorsed, for transfer. Each holder of this Warrant, by holding it, agrees that
this Warrant, when endorsed in blank, may be deemed negotiable, and that the
holder thereof, when
<PAGE> 12
the Warrant shall have been so endorsed, may be treated by the Company and all
other persons dealing with the Warrant as the absolute owner thereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer thereof on the books of the Company, any notice to
the contrary notwithstanding.
5. Certain Covenants of the Company. The Company covenants and agrees that
all shares which may be issued upon the exercise of this Warrant, will, upon
issuance, be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof; and without
limiting the generality of the foregoing, the Company covenants and agrees that
it will from time to time take all such action as may be required to assure that
the par value per share of the Common Stock is at all times equal to or less
than the then effective purchase price per share of the Common Stock issuable
pursuant to this Warrant. The Company further covenants and agrees that during
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have authorized, and reserved for the purpose of
issue upon exercise of the purchase rights evidenced by this Warrant, a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights represented by this Warrant.
6. Adjustments of Warrant Price. In the event that the Company at any time
or from time to time after the issuance of the Warrants shall declare any
dividend on the Common Stock payable in Common Stock or in any right to acquire
Common Stock for any consideration less than the Warrant Price, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by stock split, reclassification or otherwise than by
payment of a dividend in Common Stock or in any right to acquire Common Stock),
or in the event the outstanding shares of Common Stock shall be combined or
consolidated, by reverse stock split, reclassification or otherwise, into a
lesser number of shares of Common Stock, then the Warrant Price shall,
concurrently with the effectiveness of such event, be proportionately decreased
or increased, as appropriate, to avoid dilution of the exercise rights
hereunder. In the event that the Company shall declare or pay any dividend on
the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a dividend payable
in Common Stock in an amount of shares equal to the maximum number of shares
issuable upon exercise of such rights to acquire Common Stock. The Warrant
Price will be adjusted on a weighted-average basis in the event of the sale of
Additional Shares of Capital Stock for consideration less than the Warrant Price
(except in connection with corporate partnership or research and development
agreements). For the purposes of this Section 6, the value of consideration
other than cash received for the issuance of Additional Shares of Capital Stock
shall be computed at the fair value thereof at the time of such issuance, as
determined in good faith by the Board of Directors of the Company.
7. Adjustments for Reclassification and Reorganization. In case of any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant (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 case of any consolidation or merger of the Company with or
into another corporation or in case of any sale or transfer to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the Company, or such successor or purchasing corporation, as the case
may be, shall, without payment of any additional consideration therefor, execute
or require the execution of new warrants providing that the holders of the
Warrants shall have the right to exercise such new warrants (upon terms not less
favorable to the holders than those then applicable to the Warrants) and to
receive upon such exercise, in lieu of
<PAGE> 13
each share of Common Stock theretofore issuable upon exercise of the Warrants,
the kind and amount of shares of stock, other securities, money or property
receivable upon such reclassification, change, consolidation, merger, sale or
transfer by the holder of one share of Common Stock issuable upon exercise of
the Warrants had the Warrants been exercised immediately prior to such
reclassification, change, consolidation, merger, sale or transfer. Such new
warrants shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in Section 6 hereof and this
Section 7. The provisions of this Section 7 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales and transfers.
8. Notices. Whenever the Warrant Price shall be adjusted pursuant to
Section 6 hereof, or there shall be a reclassification, reorganization or other
event specified in Section 7 hereof, the Company shall promptly prepare a
certificate signed by its President or a Vice President and by its Treasurer or
Assistant Treasurer or its Secretary or Assistant Secretary, setting forth in
reasonable detail, as the case may be, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
the Warrant Price after giving effect to such adjustment, and information
regarding the execution of new warrants, and shall promptly cause copies of such
certificate to be mailed (by first class mail and postage prepaid) to the
registered holders of the Warrants.
In the event the Company shall take any action which pursuant to Section 6
may result in an adjustment of the Warrant Price, or pursuant to Section 7 may
result in the execution of new warrants, the Company will give to the registered
holders of the Warrants at their last addresses known to the Company written
notice of such action ten (10) days in advance of its effective date in order to
afford to such holders of the Warrants an opportunity to exercise the Warrants
and to purchase shares of Common Stock of the Company prior to such action
becoming effective.
9. Fractional Shares. No fractional shares of Common Stock will be issued
in connection with any purchase hereunder.
10. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of
reasonable evidence satisfactory to it of the ownership of and the loss, theft,\
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) of reasonable indemnity and (in case of mutilation) upon surrender
and cancellation thereof, the Company will execute and deliver, in lieu thereof
a new Warrant of like tenor.
11. Restrictions on Transfer. This Warrant is, and any Warrant Shares
issued upon the exercise of this Warrant will be, issued subject to the
restrictions on transfer contained in this Warrant or any certificate for
Warrant Shares issued in exchange or substitution for this Warrant or any
outstanding certificate for Warrant Shares and shall bear the restrictive
legend(s), if any, on this Warrant or such outstanding certificate for Warrant
Shares unless, in the opinion of counsel for the Company, such legend(s) may be
removed therefrom.
12. Headings. The description headings of the several sections of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.
<PAGE> 14
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer under its corporate seal, attested by its duly
authorized officer, on the date of this Warrant.
VAXCEL, INC.
By:
As its:
ATTEST:
<PAGE> 15
EXHIBIT A
PURCHASE AGREEMENT
Date:___________________
TO:
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby agrees to purchase shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by this Warrant.
Signature:
---------------------------
Address:
-----------------------------
-----------------------------
* * *
ASSIGNMENT
For Value Received, _______________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock covered by such
Warrant to:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
, and appoints _____________ Attorney to make such transfer of the books of
Vaxcel, Inc. maintained for such purpose, with full power of substitution in the
premises.
Dated: Signature:
---------------------------
Witness:
-----------------------------
<PAGE> 1
EXHIBIT 8
Shareholder Voting Agreements
<PAGE> 2
SHAREHOLDER VOTING AGREEMENT
THIS SHAREHOLDER VOTING AGREEMENT (this "Agreement") is made and entered into
as of December 6, 1996, by and between CytRx Corporation, a Delaware corporation
("CytRx"), and the undersigned shareholder (the "Shareholder") of Zynaxis, Inc.
("Zynaxis").
WHEREAS, the Shareholder desires that CytRx, Vaxcel, Inc., a Delaware
corporation, Vaxcel Merger Subsidiary, Inc., a newly formed Georgia corporation,
and Zynaxis enter into an Agreement and Plan of Merger and Contribution dated
the date hereof (as the same may be amended or supplemented, the "Merger and
Contribution Agreement"); and
WHEREAS, the Shareholder is executing this Agreement as an inducement to
CytRx to enter into and execute the Merger and Contribution Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by CytRx of
the Merger and Contribution Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. Representations and Warranties. The Shareholder represents and warrants
to CytRx as follows:
(a) The Shareholder is the record and beneficial owner of the number
of shares (such "Shareholder's Shares") of Zynaxis Common Stock and Zynaxis
Series A Convertible Preferred Stock (collectively, the "Zynaxis Stock") set
forth below such Shareholder's name on the signature page hereof. Except for
the Shareholder's Shares, the Shareholder is not the record or beneficial owner
of any shares of Zynaxis Stock. This Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of, the
Shareholder, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or by which it is bound or to which the
Shareholder's Shares are subject. If the Shareholder is married and the
Shareholder's Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Shareholder's spouse, enforceable against such person in
accordance with its terms. Performance by the Shareholder of its obligations
hereunder will not violate, or require any consent, approval, or notice under,
any provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares.
(c) The Shareholder's Shares and the certificates representing such
Shares are now, and at all times during the term hereof will be, held by the
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
<PAGE> 3
(d) With the exception of the agreement between QED and Zynaxis
regarding QED's relationship as Zynaxis's agent for the sale of the Cauldron
Division, no broker, investment banker, financial adviser or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Shareholder.
(e) The Shareholder understands and acknowledges that CytRx is
entering into the Merger and Contribution Agreement in reliance upon the
Shareholder's execution and delivery of this Agreement. The Shareholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted in
consideration for the execution and delivery of the Merger and Contribution
Agreement by CytRx.
2. Voting Agreements. The Shareholder agrees with, and covenants to, CytRx
as follows:
(a) At any meeting of shareholders of Zynaxis called to vote upon any
of the matters contemplated by the Merger and Contribution Agreement (including,
without limitation, the Charter Amendment and the sale of substantially all of
the assets of Zynaxis as contemplated by the Liquidation Agreement) or at any
adjournment thereof or in any other circumstances upon which a vote, consent or
other approval with respect to any of the matters contemplated by the Merger and
Contribution Agreement is sought (each a "Shareholders' Meeting"), the
Shareholder shall vote (or cause to be voted) the Shareholder's Shares in favor
of each of the matters contemplated by the Merger and Contribution Agreement.
(b) At any meeting of shareholders of Zynaxis or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) such
Shareholder's Shares against (i) any merger, consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by Zynaxis (other than the transactions contemplated by the
Merger and Contribution Agreement), or (ii) any amendment of Zynaxis's Articles
of Incorporation, as amended, or Bylaws or other proposal or transaction
involving Zynaxis or any of its subsidiaries, which amendment or other proposal
or transaction would in any manner impede, frustrate, prevent or nullify any of
the transactions contemplated by the Merger and Contribution Agreement (each of
the foregoing in clause (i) or (ii) above, a "Competing Transaction").
3. Covenants. The Shareholder agrees with, and covenants to, CytRx as
follows:
(a) The Shareholder shall not (i) transfer (which term shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the
Shareholder's Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of the Shareholder's Shares or any interest therein, (iii) grant any
proxy, power of attorney or other authorization in or with respect to the
Shareholder's Shares, except for this Agreement, or (iv) deposit the
Shareholder's Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shareholder's Shares; provided, that the
Shareholder may transfer (as defined above) any of the Shareholder's Shares to
any other person who is on the date hereof, or to any family member of a person
or charitable institution which prior to such transfer becomes, a party to this
Agreement bound by all the obligations of the "Shareholder" hereunder.
<PAGE> 4
(b) The Shareholder hereby waives any rights of appraisal, or rights
to dissent from the transactions contemplated by the Merger and Contribution
Agreement, that such Shareholder may have (including, without limitation, any
rights arising under Subchapter E of Chapter 25 of the Pennsylvania Business
Corporation Law).
(c) The Shareholder shall not, nor shall it permit any investment
banker, attorney or other adviser or representative of the Shareholder to,
directly or indirectly, (i) solicit, initiate or encourage the submission of,
any takeover proposal or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal.
For all purposes hereof, "takeover proposal" means any proposal for a merger or
other business combination involving Zynaxis or any of its subsidiaries or any
proposal or offer to acquire in any manner, directly or indirectly, an equity
interest in any voting securities of, or a substantial portion of the assets of
Zynaxis or any of its subsidiaries, other than the transactions contemplated by
the Merger and Contribution Agreement and other than any transfer expressly
permitted by the proviso to Section 3(a).
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) The Shareholder hereby irrevocably grants to, and appoints, CytRx
and Jack J. Luchese, President of CytRx, and Mark W. Reynolds, Chief Financial
Officer of CytRx, in their respective capacities as officers of CytRx, and any
individual who shall hereafter succeed to any such office of CytRx, and each of
them individually, the Shareholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of the Shareholder, to
vote the Shareholder's Shares, or grant a consent or approval in respect of such
Shares (i) in favor of each of the matters contemplated by the Merger and
Contribution Agreement, and (ii) against any Competing Transaction.
(b) The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 4 is given in connection with the execution of the Merger
and Contribution Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 1759 of the
Pennsylvania Business Corporation Act as a proxy coupled with an interest.
5. Certain Events. The Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of the
Shareholder's Shares shall pass, whether by operation of law or otherwise,
including without limitation the Shareholder's successors or assigns. In the
event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of Zynaxis affecting
the Zynaxis Stock, or the acquisition of additional shares of Zynaxis Stock or
other voting securities of Zynaxis by the Shareholder, the number of the
Shareholder's Shares subject to the terms of this Agreement shall be adjusted
appropriately and this Agreement and the obligations hereunder shall attach to
any additional shares of Zynaxis Stock or other voting securities of Zynaxis
issued to or acquired by the Shareholder.
<PAGE> 5
6. Regulatory Approvals. Each of the provisions of this Agreement is
subject to compliance with applicable regulatory conditions and receipt of any
required regulatory approvals.
7. Further Assurances. The Shareholder shall, upon request of CytRx,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by CytRx to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote such Shareholder's Shares as
contemplated by Section 4 of this Agreement in CytRx and the other irrevocable
proxies described therein at the expense of CytRx.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder; shall terminate upon the first to occur of (x) the closing of
the transactions contemplated by the Merger and Contribution Agreement, or (y)
the date upon which the Merger and Contribution Agreement is terminated in
accordance with its terms; provided that if an "Extension Event" shall have
occurred as of or prior to termination of the Merger and Contribution Agreement,
then, for a period of one year following such termination, (i) the rights and
obligations of the parties hereto under Sections 2, 3(c), 4(a) and 5 hereof
shall continue in full force and effect and (ii) the Shareholder shall not
transfer any or all of the Shareholder's Shares in connection with any Competing
Transaction or takeover proposal. For purposes of the foregoing, an "Extension
Event" shall mean any of the following events: (A) the shareholders meeting to
approve the matters contemplated by the Merger and Contribution Agreement shall
not have been held or the requisite approval of such matters at such meeting by
the holders of Zynaxis Stock shall not have been obtained, or (B) any person
(other than CytRx or any subsidiary of CytRx) shall have made, or disclosed an
intention to make, a takeover proposal or proposal for a Competing Transaction.
9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger and
Contribution Agreement.
(b) All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to CytRx, to the address set forth in
Section 11.8 of the Merger and Contribution Agreement; and (ii) if to the
Shareholder, to its address shown below its signature on the last page hereof.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
(e) This Agreement (including the documents and instruments referred
to herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
<PAGE> 6
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 3(a).
Any assignment in violation of the foregoing shall be void.
(h) The Shareholder agrees that irreparable damage would occur and
that CytRx would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that CytRx
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
(i) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[Remainder of page intentionally left blank.]
<PAGE> 7
IN WITNESS WHEREOF, the undersigned parties have executed and delivered this
Shareholder Voting Agreement as of the day and year first above written.
CYTRX CORPORATION
By: /s/ Jack J. Luchese
President
SHAREHOLDER:
/s/ Senmed Medical Ventures,
by Vincent M. Paglino
Name: Vincent M. Paglino
Address: Senmed Medical Ventures
4445 Lake Forest Drive,
Suite 600
Cincinnati OH 45242
Number of Shares of
Zynaxis Common Stock
Subject to Agreement: 994,464
Number of Shares of
Zynaxis Preferred Stock
Subject to Agreement: 135,000
<PAGE> 8
SHAREHOLDER VOTING AGREEMENT
THIS SHAREHOLDER VOTING AGREEMENT (this "Agreement") is made and entered into
as of December 6, 1996, by and between CytRx Corporation, a Delaware corporation
("CytRx"), and the undersigned shareholder (the "Shareholder") of Zynaxis, Inc.
("Zynaxis").
WHEREAS, the Shareholder desires that CytRx, Vaxcel, Inc., a Delaware
corporation, Vaxcel Merger Subsidiary, Inc., a newly formed Georgia corporation,
and Zynaxis enter into an Agreement and Plan of Merger and Contribution dated
the date hereof (as the same may be amended or supplemented, the "Merger and
Contribution Agreement"); and
WHEREAS, the Shareholder is executing this Agreement as an inducement to
CytRx to enter into and execute the Merger and Contribution Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by CytRx of
the Merger and Contribution Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. Representations and Warranties. The Shareholder represents and warrants
to CytRx as follows:
(a) The Shareholder is the record and beneficial owner of the number
of shares (such "Shareholder's Shares") of Zynaxis Common Stock and Zynaxis
Series A Convertible Preferred Stock (collectively, the "Zynaxis Stock") set
forth below such Shareholder's name on the signature page hereof. Except for
the Shareholder's Shares, the Shareholder is not the record or beneficial owner
of any shares of Zynaxis Stock. This Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of, the
Shareholder, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or by which it is bound or to which the
Shareholder's Shares are subject. If the Shareholder is married and the
Shareholder's Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Shareholder's spouse, enforceable against such person in
accordance with its terms. Performance by the Shareholder of its obligations
hereunder will not violate, or require any consent, approval, or notice under,
any provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares.
(c) The Shareholder's Shares and the certificates representing such
Shares are now, and at all times during the term hereof will be, held by the
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
<PAGE> 9
(d) With the exception of the agreement between QED and Zynaxis
regarding QED's relationship as Zynaxis's agent for the sale of the Cauldron
Division, no broker, investment banker, financial adviser or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Shareholder.
(e) The Shareholder understands and acknowledges that CytRx is
entering into the Merger and Contribution Agreement in reliance upon the
Shareholder's execution and delivery of this Agreement. The Shareholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted in
consideration for the execution and delivery of the Merger and Contribution
Agreement by CytRx.
2. Voting Agreements. The Shareholder agrees with, and covenants to, CytRx
as follows:
(a) At any meeting of shareholders of Zynaxis called to vote upon any
of the matters contemplated by the Merger and Contribution Agreement (including,
without limitation, the Charter Amendment and the sale of substantially all of
the assets of Zynaxis as contemplated by the Liquidation Agreement) or at any
adjournment thereof or in any other circumstances upon which a vote, consent or
other approval with respect to any of the matters contemplated by the Merger and
Contribution Agreement is sought (each a "Shareholders' Meeting"), the
Shareholder shall vote (or cause to be voted) the Shareholder's Shares in favor
of each of the matters contemplated by the Merger and Contribution Agreement.
(b) At any meeting of shareholders of Zynaxis or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) such
Shareholder's Shares against (i) any merger, consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by Zynaxis (other than the transactions contemplated by the
Merger and Contribution Agreement), or (ii) any amendment of Zynaxis's Articles
of Incorporation, as amended, or Bylaws or other proposal or transaction
involving Zynaxis or any of its subsidiaries, which amendment or other proposal
or transaction would in any manner impede, frustrate, prevent or nullify any of
the transactions contemplated by the Merger and Contribution Agreement (each of
the foregoing in clause (i) or (ii) above, a "Competing Transaction").
3. Covenants. The Shareholder agrees with, and covenants to, CytRx as
follows:
(a) The Shareholder shall not (i) transfer (which term shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the
Shareholder's Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of the Shareholder's Shares or any interest therein, (iii) grant any
proxy, power of attorney or other authorization in or with respect to the
Shareholder's Shares, except for this Agreement, or (iv) deposit the
Shareholder's Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shareholder's Shares; provided, that the
Shareholder may transfer (as defined above) any of the Shareholder's Shares to
any other person who is on the date hereof, or to any family member of a person
or charitable institution which prior to such transfer becomes, a party to this
Agreement bound by all the obligations of the "Shareholder" hereunder.
<PAGE> 10
(b) The Shareholder hereby waives any rights of appraisal, or rights
to dissent from the transactions contemplated by the Merger and Contribution
Agreement, that such Shareholder may have (including, without limitation, any
rights arising under Subchapter E of Chapter 25 of the Pennsylvania Business
Corporation Law).
(c) The Shareholder shall not, nor shall it permit any investment
banker, attorney or other adviser or representative of the Shareholder to,
directly or indirectly, (i) solicit, initiate or encourage the submission of,
any takeover proposal or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal.
For all purposes hereof, "takeover proposal" means any proposal for a merger or
other business combination involving Zynaxis or any of its subsidiaries or any
proposal or offer to acquire in any manner, directly or indirectly, an equity
interest in any voting securities of, or a substantial portion of the assets of
Zynaxis or any of its subsidiaries, other than the transactions contemplated by
the Merger and Contribution Agreement and other than any transfer expressly
permitted by the proviso to Section 3(a).
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) The Shareholder hereby irrevocably grants to, and appoints, CytRx
and Jack J. Luchese, President of CytRx, and Mark W. Reynolds, Chief Financial
Officer of CytRx, in their respective capacities as officers of CytRx, and any
individual who shall hereafter succeed to any such office of CytRx, and each of
them individually, the Shareholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of the Shareholder, to
vote the Shareholder's Shares, or grant a consent or approval in respect of such
Shares (i) in favor of each of the matters contemplated by the Merger and
Contribution Agreement, and (ii) against any Competing Transaction.
(b) The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 4 is given in connection with the execution of the Merger
and Contribution Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 1759 of the
Pennsylvania Business Corporation Act as a proxy coupled with an interest.
5. Certain Events. The Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of the
Shareholder's Shares shall pass, whether by operation of law or otherwise,
including without limitation the Shareholder's successors or assigns. In the
event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of Zynaxis affecting
the Zynaxis Stock, or the acquisition of additional shares of Zynaxis Stock or
other voting securities of Zynaxis by the Shareholder, the number of the
Shareholder's Shares subject to the terms of this Agreement shall be adjusted
appropriately and this Agreement and the obligations hereunder shall attach to
any additional shares of Zynaxis Stock or other voting securities of Zynaxis
issued to or acquired by the Shareholder.
<PAGE> 11
6. Regulatory Approvals. Each of the provisions of this Agreement is
subject to compliance with applicable regulatory conditions and receipt of any
required regulatory approvals.
7. Further Assurances. The Shareholder shall, upon request of CytRx,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by CytRx to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote such Shareholder's Shares as
contemplated by Section 4 of this Agreement in CytRx and the other irrevocable
proxies described therein at the expense of CytRx.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder; shall terminate upon the first to occur of (x) the closing of
the transactions contemplated by the Merger and Contribution Agreement, or (y)
the date upon which the Merger and Contribution Agreement is terminated in
accordance with its terms; provided that if an "Extension Event" shall have
occurred as of or prior to termination of the Merger and Contribution Agreement,
then, for a period of one year following such termination, (i) the rights and
obligations of the parties hereto under Sections 2, 3(c), 4(a) and 5 hereof
shall continue in full force and effect and (ii) the Shareholder shall not
transfer any or all of the Shareholder's Shares in connection with any Competing
Transaction or takeover proposal. For purposes of the foregoing, an "Extension
Event" shall mean any of the following events: (A) the shareholders meeting to
approve the matters contemplated by the Merger and Contribution Agreement shall
not have been held or the requisite approval of such matters at such meeting by
the holders of Zynaxis Stock shall not have been obtained, or (B) any person
(other than CytRx or any subsidiary of CytRx) shall have made, or disclosed an
intention to make, a takeover proposal or proposal for a Competing Transaction.
9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger and
Contribution Agreement.
(b) All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to CytRx, to the address set forth in
Section 11.8 of the Merger and Contribution Agreement; and (ii) if to the
Shareholder, to its address shown below its signature on the last page hereof.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
(e) This Agreement (including the documents and instruments referred
to herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
<PAGE> 12
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 3(a).
Any assignment in violation of the foregoing shall be void.
(h) The Shareholder agrees that irreparable damage would occur and
that CytRx would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that CytRx
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
(i) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[Remainder of page intentionally left blank.]
<PAGE> 13
IN WITNESS WHEREOF, the undersigned parties have executed and delivered this
Shareholder Voting Agreement as of the day and year first above written.
CYTRX CORPORATION
By: /s/ Jack J. Luchese
President
SHAREHOLDER:
/s/ Commonwealth Venture Partners I, L.P.
by Charles A. Burton
Name: Charles A. Burton
Address: General Partner
Commonwealth Venture
Partners I, L.P.
Number of Shares
of Zynaxis Common Stock
Subject to Agreement:
Number of Shares
of Zynaxis Preferred Stock
Subject to Agreement: 10,000
<PAGE> 14
SHAREHOLDER VOTING AGREEMENT
THIS SHAREHOLDER VOTING AGREEMENT (this "Agreement") is made and entered into
as of December 6, 1996, by and between CytRx Corporation, a Delaware corporation
("CytRx"), and the undersigned shareholder (the "Shareholder") of Zynaxis, Inc.
("Zynaxis").
WHEREAS, the Shareholder desires that CytRx, Vaxcel, Inc., a Delaware
corporation, Vaxcel Merger Subsidiary, Inc., a newly formed Georgia corporation,
and Zynaxis enter into an Agreement and Plan of Merger and Contribution dated
the date hereof (as the same may be amended or supplemented, the "Merger and
Contribution Agreement"); and
WHEREAS, the Shareholder is executing this Agreement as an inducement to
CytRx to enter into and execute the Merger and Contribution Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by CytRx of
the Merger and Contribution Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. Representations and Warranties. The Shareholder represents and warrants
to CytRx as follows:
(a) The Shareholder is the record and beneficial owner of the number
of shares (such "Shareholder's Shares") of Zynaxis Common Stock and Zynaxis
Series A Convertible Preferred Stock (collectively, the "Zynaxis Stock") set
forth below such Shareholder's name on the signature page hereof. Except for
the Shareholder's Shares, the Shareholder is not the record or beneficial owner
of any shares of Zynaxis Stock. This Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of, the
Shareholder, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or by which it is bound or to which the
Shareholder's Shares are subject. If the Shareholder is married and the
Shareholder's Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Shareholder's spouse, enforceable against such person in
accordance with its terms. Performance by the Shareholder of its obligations
hereunder will not violate, or require any consent, approval, or notice under,
any provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares.
(c) The Shareholder's Shares and the certificates representing such
Shares are now, and at all times during the term hereof will be, held by the
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
<PAGE> 15
(d) With the exception of the agreement between QED and Zynaxis
regarding QED's relationship as Zynaxis's agent for the sale of the Cauldron
Division, no broker, investment banker, financial adviser or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Shareholder.
(e) The Shareholder understands and acknowledges that CytRx is
entering into the Merger and Contribution Agreement in reliance upon the
Shareholder's execution and delivery of this Agreement. The Shareholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted in
consideration for the execution and delivery of the Merger and Contribution
Agreement by CytRx.
2. Voting Agreements. The Shareholder agrees with, and covenants to, CytRx
as follows:
(a) At any meeting of shareholders of Zynaxis called to vote upon any
of the matters contemplated by the Merger and Contribution Agreement (including,
without limitation, the Charter Amendment and the sale of substantially all of
the assets of Zynaxis as contemplated by the Liquidation Agreement) or at any
adjournment thereof or in any other circumstances upon which a vote, consent or
other approval with respect to any of the matters contemplated by the Merger and
Contribution Agreement is sought (each a "Shareholders' Meeting"), the
Shareholder shall vote (or cause to be voted) the Shareholder's Shares in favor
of each of the matters contemplated by the Merger and Contribution Agreement.
(b) At any meeting of shareholders of Zynaxis or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) such
Shareholder's Shares against (i) any merger, consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by Zynaxis (other than the transactions contemplated by the
Merger and Contribution Agreement), or (ii) any amendment of Zynaxis's Articles
of Incorporation, as amended, or Bylaws or other proposal or transaction
involving Zynaxis or any of its subsidiaries, which amendment or other proposal
or transaction would in any manner impede, frustrate, prevent or nullify any of
the transactions contemplated by the Merger and Contribution Agreement (each of
the foregoing in clause (i) or (ii) above, a "Competing Transaction").
3. Covenants. The Shareholder agrees with, and covenants to, CytRx as
follows:
(a) The Shareholder shall not (i) transfer (which term shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the
Shareholder's Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of the Shareholder's Shares or any interest therein, (iii) grant any
proxy, power of attorney or other authorization in or with respect to the
Shareholder's Shares, except for this Agreement, or (iv) deposit the
Shareholder's Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shareholder's Shares; provided, that the
Shareholder may transfer (as defined above) any of the Shareholder's Shares to
any other person who is on the date hereof, or to any family member of a person
or charitable institution which prior to such transfer becomes, a party to this
Agreement bound by all the obligations of the "Shareholder" hereunder.
<PAGE> 16
(b) The Shareholder hereby waives any rights of appraisal, or rights
to dissent from the transactions contemplated by the Merger and Contribution
Agreement, that such Shareholder may have (including, without limitation, any
rights arising under Subchapter E of Chapter 25 of the Pennsylvania Business
Corporation Law).
(c) The Shareholder shall not, nor shall it permit any investment
banker, attorney or other adviser or representative of the Shareholder to,
directly or indirectly, (i) solicit, initiate or encourage the submission of,
any takeover proposal or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal.
For all purposes hereof, "takeover proposal" means any proposal for a merger or
other business combination involving Zynaxis or any of its subsidiaries or any
proposal or offer to acquire in any manner, directly or indirectly, an equity
interest in any voting securities of, or a substantial portion of the assets of
Zynaxis or any of its subsidiaries, other than the transactions contemplated by
the Merger and Contribution Agreement and other than any transfer expressly
permitted by the proviso to Section 3(a).
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) The Shareholder hereby irrevocably grants to, and appoints, CytRx
and Jack J. Luchese, President of CytRx, and Mark W. Reynolds, Chief Financial
Officer of CytRx, in their respective capacities as officers of CytRx, and any
individual who shall hereafter succeed to any such office of CytRx, and each of
them individually, the Shareholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of the Shareholder, to
vote the Shareholder's Shares, or grant a consent or approval in respect of such
Shares (i) in favor of each of the matters contemplated by the Merger and
Contribution Agreement, and (ii) against any Competing Transaction.
(b) The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 4 is given in connection with the execution of the Merger
and Contribution Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 1759 of the
Pennsylvania Business Corporation Act as a proxy coupled with an interest.
5. Certain Events. The Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of the
Shareholder's Shares shall pass, whether by operation of law or otherwise,
including without limitation the Shareholder's successors or assigns. In the
event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of Zynaxis affecting
the Zynaxis Stock, or the acquisition of additional shares of Zynaxis Stock or
other voting securities of Zynaxis by the Shareholder, the number of the
Shareholder's Shares subject to the terms of this Agreement shall be adjusted
appropriately and this Agreement and the obligations hereunder shall attach to
any additional shares of Zynaxis Stock or other voting securities of Zynaxis
issued to or acquired by the Shareholder.
<PAGE> 17
6. Regulatory Approvals. Each of the provisions of this Agreement is
subject to compliance with applicable regulatory conditions and receipt of any
required regulatory approvals.
7. Further Assurances. The Shareholder shall, upon request of CytRx,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by CytRx to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote such Shareholder's Shares as
contemplated by Section 4 of this Agreement in CytRx and the other irrevocable
proxies described therein at the expense of CytRx.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder; shall terminate upon the first to occur of (x) the closing of
the transactions contemplated by the Merger and Contribution Agreement, or (y)
the date upon which the Merger and Contribution Agreement is terminated in
accordance with its terms; provided that if an "Extension Event" shall have
occurred as of or prior to termination of the Merger and Contribution Agreement,
then, for a period of one year following such termination, (i) the rights and
obligations of the parties hereto under Sections 2, 3(c), 4(a) and 5 hereof
shall continue in full force and effect and (ii) the Shareholder shall not
transfer any or all of the Shareholder's Shares in connection with any Competing
Transaction or takeover proposal. For purposes of the foregoing, an "Extension
Event" shall mean any of the following events: (A) the shareholders meeting to
approve the matters contemplated by the Merger and Contribution Agreement shall
not have been held or the requisite approval of such matters at such meeting by
the holders of Zynaxis Stock shall not have been obtained, or (B) any person
(other than CytRx or any subsidiary of CytRx) shall have made, or disclosed an
intention to make, a takeover proposal or proposal for a Competing Transaction.
9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger and
Contribution Agreement.
(b) All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to CytRx, to the address set forth in
Section 11.8 of the Merger and Contribution Agreement; and (ii) if to the
Shareholder, to its address shown below its signature on the last page hereof.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
(e) This Agreement (including the documents and instruments referred
to herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
<PAGE> 18
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 3(a).
Any assignment in violation of the foregoing shall be void.
(h) The Shareholder agrees that irreparable damage would occur and
that CytRx would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that CytRx
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
(i) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[Remainder of page intentionally left blank.]
<PAGE> 19
IN WITNESS WHEREOF, the undersigned parties have executed and delivered this
Shareholder Voting Agreement as of the day and year first above written.
CYTRX CORPORATION
By: /s/ Jack J. Luchese
President
SHAREHOLDER:
/s/ Philadelphia Ventures Japan I, L.P.
by Charles A. Burton
Name: Charles A. Burton
Address: General Partner
Philadelphia Ventures
Japan I, L.P.
Number of Shares
of Zynaxis Common Stock
Subject to Agreement:
Number of Shares
of Zynaxis Preferred Stock
Subject to Agreement: 2,500
<PAGE> 20
SHAREHOLDER VOTING AGREEMENT
THIS SHAREHOLDER VOTING AGREEMENT (this "Agreement") is made and entered into
as of December 6, 1996, by and between CytRx Corporation, a Delaware corporation
("CytRx"), and the undersigned shareholder (the "Shareholder") of Zynaxis, Inc.
("Zynaxis").
WHEREAS, the Shareholder desires that CytRx, Vaxcel, Inc., a Delaware
corporation, Vaxcel Merger Subsidiary, Inc., a newly formed Georgia corporation,
and Zynaxis enter into an Agreement and Plan of Merger and Contribution dated
the date hereof (as the same may be amended or supplemented, the "Merger and
Contribution Agreement"); and
WHEREAS, the Shareholder is executing this Agreement as an inducement to
CytRx to enter into and execute the Merger and Contribution Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by CytRx of
the Merger and Contribution Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. Representations and Warranties. The Shareholder represents and warrants
to CytRx as follows:
(a) The Shareholder is the record and beneficial owner of the number
of shares (such "Shareholder's Shares") of Zynaxis Common Stock and Zynaxis
Series A Convertible Preferred Stock (collectively, the "Zynaxis Stock") set
forth below such Shareholder's name on the signature page hereof. Except for
the Shareholder's Shares, the Shareholder is not the record or beneficial owner
of any shares of Zynaxis Stock. This Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of, the
Shareholder, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or by which it is bound or to which the
Shareholder's Shares are subject. If the Shareholder is married and the
Shareholder's Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Shareholder's spouse, enforceable against such person in
accordance with its terms. Performance by the Shareholder of its obligations
hereunder will not violate, or require any consent, approval, or notice under,
any provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares.
(c) The Shareholder's Shares and the certificates representing such
Shares are now, and at all times during the term hereof will be, held by the
Shareholder, or by a nominee or custodian for the benefit of such Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder.
<PAGE> 21
(d) With the exception of the agreement between QED and Zynaxis
regarding QED's relationship as Zynaxis's agent for the sale of the Cauldron
Division, no broker, investment banker, financial adviser or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Shareholder.
(e) The Shareholder understands and acknowledges that CytRx is
entering into the Merger and Contribution Agreement in reliance upon the
Shareholder's execution and delivery of this Agreement. The Shareholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted in
consideration for the execution and delivery of the Merger and Contribution
Agreement by CytRx.
2. Voting Agreements. The Shareholder agrees with, and covenants to, CytRx
as follows:
(a) At any meeting of shareholders of Zynaxis called to vote upon any
of the matters contemplated by the Merger and Contribution Agreement (including,
without limitation, the Charter Amendment and the sale of substantially all of
the assets of Zynaxis as contemplated by the Liquidation Agreement) or at any
adjournment thereof or in any other circumstances upon which a vote, consent or
other approval with respect to any of the matters contemplated by the Merger and
Contribution Agreement is sought (each a "Shareholders' Meeting"), the
Shareholder shall vote (or cause to be voted) the Shareholder's Shares in favor
of each of the matters contemplated by the Merger and Contribution Agreement.
(b) At any meeting of shareholders of Zynaxis or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) such
Shareholder's Shares against (i) any merger, consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by Zynaxis (other than the transactions contemplated by the
Merger and Contribution Agreement), or (ii) any amendment of Zynaxis's Articles
of Incorporation, as amended, or Bylaws or other proposal or transaction
involving Zynaxis or any of its subsidiaries, which amendment or other proposal
or transaction would in any manner impede, frustrate, prevent or nullify any of
the transactions contemplated by the Merger and Contribution Agreement (each of
the foregoing in clause (i) or (ii) above, a "Competing Transaction").
3. Covenants. The Shareholder agrees with, and covenants to, CytRx as
follows:
(a) The Shareholder shall not (i) transfer (which term shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the
Shareholder's Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of the Shareholder's Shares or any interest therein, (iii) grant any
proxy, power of attorney or other authorization in or with respect to the
Shareholder's Shares, except for this Agreement, or (iv) deposit the
Shareholder's Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shareholder's Shares; provided, that the
Shareholder may transfer (as defined above) any of the Shareholder's Shares to
any other person who is on the date hereof, or to any family member of a person
or charitable institution which prior to such transfer becomes, a party to this
Agreement bound by all the obligations of the "Shareholder" hereunder.
<PAGE> 22
(b) The Shareholder hereby waives any rights of appraisal, or rights
to dissent from the transactions contemplated by the Merger and Contribution
Agreement, that such Shareholder may have (including, without limitation, any
rights arising under Subchapter E of Chapter 25 of the Pennsylvania Business
Corporation Law).
(c) The Shareholder shall not, nor shall it permit any investment
banker, attorney or other adviser or representative of the Shareholder to,
directly or indirectly, (i) solicit, initiate or encourage the submission of,
any takeover proposal or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal.
For all purposes hereof, "takeover proposal" means any proposal for a merger or
other business combination involving Zynaxis or any of its subsidiaries or any
proposal or offer to acquire in any manner, directly or indirectly, an equity
interest in any voting securities of, or a substantial portion of the assets of
Zynaxis or any of its subsidiaries, other than the transactions contemplated by
the Merger and Contribution Agreement and other than any transfer expressly
permitted by the proviso to Section 3(a).
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) The Shareholder hereby irrevocably grants to, and appoints, CytRx
and Jack J. Luchese, President of CytRx, and Mark W. Reynolds, Chief Financial
Officer of CytRx, in their respective capacities as officers of CytRx, and any
individual who shall hereafter succeed to any such office of CytRx, and each of
them individually, the Shareholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of the Shareholder, to
vote the Shareholder's Shares, or grant a consent or approval in respect of such
Shares (i) in favor of each of the matters contemplated by the Merger and
Contribution Agreement, and (ii) against any Competing Transaction.
(b) The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 4 is given in connection with the execution of the Merger
and Contribution Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 1759 of the
Pennsylvania Business Corporation Act as a proxy coupled with an interest.
5. Certain Events. The Shareholder agrees that this Agreement and the
obligations hereunder shall attach to the Shareholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of the
Shareholder's Shares shall pass, whether by operation of law or otherwise,
including without limitation the Shareholder's successors or assigns. In the
event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of Zynaxis affecting
the Zynaxis Stock, or the acquisition of additional shares of Zynaxis Stock or
other voting securities of Zynaxis by the Shareholder, the number of the
Shareholder's Shares subject to the terms of this Agreement shall be adjusted
appropriately and this Agreement and the obligations hereunder shall attach to
any additional shares of Zynaxis Stock or other voting securities of Zynaxis
issued to or acquired by the Shareholder.
<PAGE> 23
6. Regulatory Approvals. Each of the provisions of this Agreement is
subject to compliance with applicable regulatory conditions and receipt of any
required regulatory approvals.
7. Further Assurances. The Shareholder shall, upon request of CytRx,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by CytRx to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote such Shareholder's Shares as
contemplated by Section 4 of this Agreement in CytRx and the other irrevocable
proxies described therein at the expense of CytRx.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder; shall terminate upon the first to occur of (x) the closing of
the transactions contemplated by the Merger and Contribution Agreement, or (y)
the date upon which the Merger and Contribution Agreement is terminated in
accordance with its terms; provided that if an "Extension Event" shall have
occurred as of or prior to termination of the Merger and Contribution Agreement,
then, for a period of one year following such termination, (i) the rights and
obligations of the parties hereto under Sections 2, 3(c), 4(a) and 5 hereof
shall continue in full force and effect and (ii) the Shareholder shall not
transfer any or all of the Shareholder's Shares in connection with any Competing
Transaction or takeover proposal. For purposes of the foregoing, an "Extension
Event" shall mean any of the following events: (A) the shareholders meeting to
approve the matters contemplated by the Merger and Contribution Agreement shall
not have been held or the requisite approval of such matters at such meeting by
the holders of Zynaxis Stock shall not have been obtained, or (B) any person
(other than CytRx or any subsidiary of CytRx) shall have made, or disclosed an
intention to make, a takeover proposal or proposal for a Competing Transaction.
9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger and
Contribution Agreement.
(b) All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to CytRx, to the address set forth in
Section 11.8 of the Merger and Contribution Agreement; and (ii) if to the
Shareholder, to its address shown below its signature on the last page hereof.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
(e) This Agreement (including the documents and instruments referred
to herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
<PAGE> 24
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 3(a).
Any assignment in violation of the foregoing shall be void.
(h) The Shareholder agrees that irreparable damage would occur and
that CytRx would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that CytRx
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
(i) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[Remainder of page intentionally left blank.]
<PAGE> 25
IN WITNESS WHEREOF, the undersigned parties have executed and delivered this
Shareholder Voting Agreement as of the day and year first above written.
CYTRX CORPORATION
By: /s/ Jack J. Luchese
President
SHAREHOLDER:
/s/ Gus G. Casten
Name: Gus G. Casten
Address: 238 Meadowcroft Circle
Birmingham, Alabama 35242-2956
Number of Shares
of Zynaxis Common Stock
Subject to Agreement: 94,244
Number of Shares
of Zynaxis Preferred Stock
Subject to Agreement: 12,500
<PAGE> 26
SHAREHOLDER VOTING AGREEMENT
THIS SHAREHOLDER VOTING AGREEMENT (this "Agreement") is made and entered into
as of December 6, 1996, by and between CytRx Corporation, a Delaware corporation
("CytRx"), and the undersigned shareholder (the "Shareholder") of Zynaxis, Inc.
("Zynaxis").
WHEREAS, the Shareholder desires that CytRx, Vaxcel, Inc., a Delaware
corporation, Vaxcel Merger Subsidiary, Inc., a newly formed Georgia corporation,
and Zynaxis enter into an Agreement and Plan of Merger and Contribution dated
the date hereof (as the same may be amended or supplemented, the "Merger and
Contribution Agreement"); and
WHEREAS, the Shareholder is executing this Agreement as an inducement to
CytRx to enter into and execute the Merger and Contribution Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by CytRx of
the Merger and Contribution Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. Representations and Warranties. The Shareholder represents and warrants
to CytRx as follows:
(a) The Shareholder is the record and beneficial owner of the number
of shares (such "Shareholder's Shares") of Zynaxis Common Stock and Zynaxis
Series A Convertible Preferred Stock (collectively, the "Zynaxis Stock") set
forth below such Shareholder's name on the signature page hereof. Except for
the Shareholder's Shares, the Shareholder is not the record or beneficial owner
of any shares of Zynaxis Stock. This Agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of, the
Shareholder, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or by which it is bound or to which the
Shareholder's Shares are subject. If the Shareholder is married and the
Shareholder's Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Shareholder's spouse, enforceable against such person in
accordance with its terms. Performance by the Shareholder of its obligations
hereunder will not violate, or require any consent, approval, or notice under,
any provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares.
(c) The Shareholder's Shares and the certificates representing such
Shares are now held by the Shareholder, or by a nominee or custodian for the
benefit of such Shareholder, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings or arrangements
or any other encumbrances whatsoever, except as established by this Agreement.
(d) With the exception of the agreement between QED and Zynaxis
regarding QED's relationship as Zynaxis's agent for the sale of the Cauldron
Division, no broker, investment banker,
<PAGE> 27
financial adviser or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
the Shareholder.
(e) The Shareholder understands and acknowledges that CytRx is
entering into the Merger and Contribution Agreement in reliance upon the
Shareholder's execution and delivery of this Agreement. The Shareholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted in
consideration for the execution and delivery of the Merger and Contribution
Agreement by CytRx.
2. Voting Agreements. The Shareholder agrees with, and covenants to, CytRx
as follows:
(a) At any meeting of shareholders of Zynaxis called to vote upon any
of the matters contemplated by the Merger and Contribution Agreement (including,
without limitation, the Charter Amendment and the sale of substantially all of
the assets of Zynaxis as contemplated by the Liquidation Agreement) or at any
adjournment thereof or in any other circumstances upon which a vote, consent or
other approval with respect to any of the matters contemplated by the Merger and
Contribution Agreement is sought (each a "Shareholders' Meeting"), the
Shareholder shall vote (or cause to be voted) any of the Shareholder's Shares
held by the Shareholder at the time of such vote in favor of each of the matters
contemplated by the Merger and Contribution Agreement.
(b) At any meeting of shareholders of Zynaxis or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) any of the
Shareholder's Shares held by the Shareholder at the time of such vote against
(i) any merger, consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of or
by Zynaxis (other than the transactions contemplated by the Merger and
Contribution Agreement), or (ii) any amendment of Zynaxis's Articles of
Incorporation, as amended, or Bylaws or other proposal or transaction involving
Zynaxis or any of its subsidiaries, which amendment or other proposal or
transaction would in any manner impede, frustrate, prevent or nullify any of the
transactions contemplated by the Merger and Contribution Agreement (each of the
foregoing in clause (i) or (ii) above, a "Competing Transaction").
3. Covenants. The Shareholder agrees with, and covenants to, CytRx as
follows:
(a) The Shareholder shall not (i) grant any proxy, power of attorney
or other authorization in or with respect to the Shareholder's Shares, except
for this Agreement, or (ii) deposit the Shareholder's Shares into a voting trust
or enter into a voting agreement or arrangement with respect to the
Shareholder's Shares; provided, however, that the foregoing shall not be deemed
to prohibit the Shareholder from selling any or all of the Shareholder's Shares.
(b) The Shareholder hereby waives any rights of appraisal, or rights
to dissent from the transactions contemplated by the Merger and Contribution
Agreement, that such Shareholder may have with respect to any Shareholder's
Shares held by Shareholder at times at which such rights may be exercised
(including, without limitation, any rights arising under Subchapter E of Chapter
25 of the Pennsylvania Business Corporation Law).
(c) The Shareholder shall not, nor shall it permit any investment
banker, attorney or other adviser or representative of the Shareholder to,
directly or indirectly, (i) solicit, initiate or encourage
<PAGE> 28
the submission of, any takeover proposal or (ii) participate in any discussions
or negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
takeover proposal. For all purposes hereof, "takeover proposal" means any
proposal for a merger or other business combination involving Zynaxis or any of
its subsidiaries or any proposal or offer to acquire in any manner, directly or
indirectly, an equity interest in any voting securities of, or a substantial
portion of the assets of Zynaxis or any of its subsidiaries, other than the
transactions contemplated by the Merger and Contribution Agreement and other
than any transfer expressly permitted by the proviso to Section 3(a).
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) The Shareholder hereby irrevocably grants to, and appoints, CytRx
and Jack J. Luchese, President of CytRx, and Mark W. Reynolds, Chief Financial
Officer of CytRx, in their respective capacities as officers of CytRx, and any
individual who shall hereafter succeed to any such office of CytRx, and each of
them individually, the Shareholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of the Shareholder, to
vote any of the Shareholder's Shares held by the Shareholder at the time of such
vote, or to grant a consent or approval in respect of any of such Shares held by
the Shareholder at the time such consent or approval is sought (i) in favor of
each of the matters contemplated by the Merger and Contribution Agreement, and
(ii) against any Competing Transaction.
(b) The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 4 is given in connection with the execution of the Merger
and Contribution Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 1759 of the
Pennsylvania Business Corporation Act as a proxy coupled with an interest.
5. Certain Events. The Shareholder agrees that in the event of any stock
split, stock dividend, merger, reorganization, recapitalization or other change
in the capital structure of Zynaxis affecting the Zynaxis Stock, or the
acquisition of additional shares of Zynaxis Stock or other voting securities of
Zynaxis by the Shareholder, the number of the Shareholder's Shares subject to
the terms of this Agreement shall be adjusted appropriately and this Agreement
and the obligations hereunder shall attach to any additional shares of Zynaxis
Stock or other voting securities of Zynaxis issued to or acquired by the
Shareholder.
6. Regulatory Approvals. Each of the provisions of this Agreement is
subject to compliance with applicable regulatory conditions and receipt of any
required regulatory approvals.
7. Further Assurances. The Shareholder shall, upon request of CytRx,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by CytRx to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote such Shareholder's Shares as
<PAGE> 29
contemplated by Section 4 of this Agreement in CytRx and the other irrevocable
proxies described therein at the expense of CytRx.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder; shall terminate upon the first to occur of (x) the closing of
the transactions contemplated by the Merger and Contribution Agreement, or (y)
the date upon which the Merger and Contribution Agreement is terminated in
accordance with its terms; provided that if an "Extension Event" shall have
occurred as of or prior to termination of the Merger and Contribution Agreement,
then, for a period of one year following such termination, (i) the rights and
obligations of the parties hereto under Sections 2, 3(c), 4(a) and 5 hereof
shall continue in full force and effect and (ii) the Shareholder shall not
transfer any or all of the Shareholder's Shares in connection with any Competing
Transaction or takeover proposal. For purposes of the foregoing, an "Extension
Event" shall mean any of the following events: (A) the shareholders meeting to
approve the matters contemplated by the Merger and Contribution Agreement shall
not have been held or the requisite approval of such matters at such meeting by
the holders of Zynaxis Stock shall not have been obtained, or (B) any person
(other than CytRx or any subsidiary of CytRx) shall have made, or disclosed an
intention to make, a takeover proposal or proposal for a Competing Transaction.
9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger and
Contribution Agreement.
(b) All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to CytRx, to the address set forth in
Section 11.8 of the Merger and Contribution Agreement; and (ii) if to the
Shareholder, to its address shown below its signature on the last page hereof.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
(e) This Agreement (including the documents and instruments referred
to herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 3(a).
Any assignment in violation of the foregoing shall be void.
<PAGE> 30
(h) The Shareholder agrees that irreparable damage would occur and
that CytRx would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that CytRx
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
(i) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[Remainder of page intentionally left blank.]
<PAGE> 31
IN WITNESS WHEREOF, the undersigned parties have executed and delivered this
Shareholder Voting Agreement as of the day and year first above written.
CYTRX CORPORATION
By: /s/ Jack J. Luchese
President
SHAREHOLDER:
/s/ CIP Capital L.P.
by Wayne B. Weisman, V.P. of
CIP Capital Management Inc.,
General Partner
Name: CIP Capital L.P.
Address: 20 Valley Stream Parkway
Malvern, PA 19355
Number of Shares
of Zynaxis Common Stock
Subject to Agreement:
Number of Shares
of Zynaxis Preferred Stock
Subject to Agreement: 45,000
<PAGE> 32
SHAREHOLDER VOTING AGREEMENT
THIS SHAREHOLDER VOTING AGREEMENT (this "Agreement") is made and entered into
as of December 6, 1996, by and between CytRx Corporation, a Delaware corporation
("CytRx"), and the undersigned shareholder (the "Shareholder") of Zynaxis, Inc.
("Zynaxis").
WHEREAS, the Shareholder desires that CytRx, Vaxcel, Inc., a Delaware
corporation, Vaxcel Merger Subsidiary, Inc., a newly formed Georgia corporation,
and Zynaxis enter into an Agreement and Plan of Merger and Contribution dated
the date hereof (as the same may be amended or supplemented, the "Merger and
Contribution Agreement"); and
WHEREAS, the Shareholder is executing this Agreement as an inducement to
CytRx to enter into and execute the Merger and Contribution Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by CytRx of
the Merger and Contribution Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. Representations and Warranties. The Shareholder represents and warrants
to CytRx as follows:
(a) The Shareholder is the record and beneficial owner of the number
of shares of Zynaxis Common Stock (such "Shareholder's Common Shares") and
Zynaxis Series A Convertible Preferred Stock (such "Shareholder's Preferred
Shares," and together with Shareholder's Common Shares, such "Shareholder's
Shares") set forth below such Shareholder's name on the signature page hereof.
Except for the Shareholder's Shares, the Shareholder is not the record or
beneficial owner of any shares of Zynaxis Common Stock or Zynaxis Series A
Convertible Preferred Stock ("Zynaxis Stock"). This Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Shareholder, enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
consummation by the Shareholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Shareholder is a party or by which it is bound or to which the
Shareholder's Shares are subject. If the Shareholder is married and the
Shareholder's Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and binding
agreement of, the Shareholder's spouse, enforceable against such person in
accordance with its terms. Performance by the Shareholder of its obligations
hereunder will not violate, or require any consent, approval, or notice under,
any provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Shareholder or the Shareholder's Shares.
(c) The Shareholder's Preferred Shares and the certificates
representing such Shares are now, and at all times during the term hereof will
be, held by the Shareholder, or by a nominee or custodian for the benefit of
such Shareholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder. The Shareholder's Common Shares and the certificates
representing such Shares are now held by the Shareholder, or by
<PAGE> 33
a nominee or custodian for the benefit of such Shareholder, free and clear of
all liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever, except as
established by this Agreement.
(d) With the exception of the agreement between QED and Zynaxis
regarding QED's relationship as Zynaxis's agent for the sale of the Cauldron
Division, no broker, investment banker, financial adviser or other person is
entitled to any broker's, finder's, financial adviser's or other similar fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Shareholder.
(e) The Shareholder understands and acknowledges that CytRx is
entering into the Merger and Contribution Agreement in reliance upon the
Shareholder's execution and delivery of this Agreement. The Shareholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted in
consideration for the execution and delivery of the Merger and Contribution
Agreement by CytRx.
2. Voting Agreements. The Shareholder agrees with, and covenants to, CytRx
as follows:
(a) At any meeting of shareholders of Zynaxis called to vote upon any
of the matters contemplated by the Merger and Contribution Agreement (including,
without limitation, the Charter Amendment and the sale of substantially all of
the assets of Zynaxis as contemplated by the Liquidation Agreement) or at any
adjournment thereof or in any other circumstances upon which a vote, consent or
other approval with respect to any of the matters contemplated by the Merger and
Contribution Agreement is sought (each a "Shareholders' Meeting"), the
Shareholder shall vote (or cause to be voted) any of the Shareholder's Shares
held by the Shareholder at the time of such vote in favor of each of the matters
contemplated by the Merger and Contribution Agreement.
(b) At any meeting of shareholders of Zynaxis or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Shareholder shall vote (or cause to be voted) any of the
Shareholder's Shares held by the Shareholder at the time of such vote against
(i) any merger, consolidation, combination, sale of substantial assets,
reorganization, recapitalization, dissolution, liquidation or winding up of or
by Zynaxis (other than the transactions contemplated by the Merger and
Contribution Agreement), or (ii) any amendment of Zynaxis's Articles of
Incorporation, as amended, or Bylaws or other proposal or transaction involving
Zynaxis or any of its subsidiaries, which amendment or other proposal or
transaction would in any manner impede, frustrate, prevent or nullify any of the
transactions contemplated by the Merger and Contribution Agreement (each of the
foregoing in clause (i) or (ii) above, a "Competing Transaction").
<PAGE> 34
3. Covenants. The Shareholder agrees with, and covenants to, CytRx as
follows:
(a) The Shareholder shall not (i) transfer (which term shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the
Shareholder's Preferred Shares or any interest therein, (ii) enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of the Shareholder's Preferred Shares or any interest
therein, (iii) grant any proxy, power of attorney or other authorization in or
with respect to any of the Shareholder's Shares, except for this Agreement, or
(iv) deposit any of the Shareholder's Shares into a voting trust or enter into a
voting agreement or arrangement with respect to the Shareholder's Shares;
provided, however, that the foregoing shall not be deemed to prohibit the
Shareholder from selling any or all of the Shareholder's Common Shares.
(b) The Shareholder hereby waives any rights of appraisal, or rights
to dissent from the transactions contemplated by the Merger and Contribution
Agreement, that such Shareholder may have with respect to any Shareholder's
Shares held by Shareholder at times at which such rights may be exercised
(including, without limitation, any rights arising under Subchapter E of Chapter
25 of the Pennsylvania Business Corporation Law).
(c) The Shareholder shall not, nor shall it permit any investment
banker, attorney or other adviser or representative of the Shareholder to,
directly or indirectly, (i) solicit, initiate or encourage the submission of,
any takeover proposal or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any takeover proposal.
For all purposes hereof, "takeover proposal" means any proposal for a merger or
other business combination involving Zynaxis or any of its subsidiaries or any
proposal or offer to acquire in any manner, directly or indirectly, an equity
interest in any voting securities of, or a substantial portion of the assets of
Zynaxis or any of its subsidiaries, other than the transactions contemplated by
the Merger and Contribution Agreement and other than any transfer expressly
permitted by the proviso to Section 3(a).
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) The Shareholder hereby irrevocably grants to, and appoints, CytRx
and Jack J. Luchese, President of CytRx, and Mark W. Reynolds, Chief Financial
Officer of CytRx, in their respective capacities as officers of CytRx, and any
individual who shall hereafter succeed to any such office of CytRx, and each of
them individually, the Shareholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of the Shareholder, to
vote any of the Shareholder's Shares held by the Shareholder at the time of such
vote, or to grant a consent or approval in respect of any of such Shares held by
the Shareholder at the time such consent or approval is sought (i) in favor of
each of the matters contemplated by the Merger and Contribution Agreement, and
(ii) against any Competing Transaction.
(b) The Shareholder represents that any proxies heretofore given in
respect of the Shareholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy set
forth in this Section 4 is given in connection with the execution of the Merger
and Contribution Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may
<PAGE> 35
under no circumstances be revoked. The Shareholder hereby ratifies and confirms
all that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 1759 of the Pennsylvania Business
Corporation Act as a proxy coupled with an interest.
5. Certain Events. The Shareholder agrees that this Agreement and
the obligations hereunder shall attach to the Shareholder's Preferred Shares
and shall be binding upon any person or entity to which legal or beneficial
ownership of the Shareholder's Shares shall pass, whether by operation of law
or otherwise, including without limitation the Shareholder's successors or
assigns. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of
Zynaxis affecting the Zynaxis Stock, or the acquisition of additional shares of
Zynaxis Stock or other voting securities of Zynaxis by the Shareholder, the
number of the Shareholder's Shares subject to the terms of this Agreement shall
be adjusted appropriately and this Agreement and the obligations hereunder
shall attach to any additional shares of Zynaxis Stock or other voting
securities of Zynaxis issued to or acquired by the Shareholder.
6. Regulatory Approvals. Each of the provisions of this Agreement is
subject to compliance with applicable regulatory conditions and receipt of any
required regulatory approvals.
7. Further Assurances. The Shareholder shall, upon request of CytRx,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by CytRx to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote such Shareholder's Shares as
contemplated by Section 4 of this Agreement in CytRx and the other irrevocable
proxies described therein at the expense of CytRx.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder; shall terminate upon the first to occur of (x) the closing of
the transactions contemplated by the Merger and Contribution Agreement, or (y)
the date upon which the Merger and Contribution Agreement is terminated in
accordance with its terms; provided that if an "Extension Event" shall have
occurred as of or prior to termination of the Merger and Contribution Agreement,
then, for a period of one year following such termination, (i) the rights and
obligations of the parties hereto under Sections 2, 3(c), 4(a) and 5 hereof
shall continue in full force and effect and (ii) the Shareholder shall not
transfer any or all of the Shareholder's Shares in connection with any Competing
Transaction or takeover proposal. For purposes of the foregoing, an "Extension
Event" shall mean any of the following events: (A) the shareholders meeting to
approve the matters contemplated by the Merger and Contribution Agreement shall
not have been held or the requisite approval of such matters at such meeting by
the holders of Zynaxis Stock shall not have been obtained, or (B) any person
(other than CytRx or any subsidiary of CytRx) shall have made, or disclosed an
intention to make, a takeover proposal or proposal for a Competing Transaction.
9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger and
Contribution Agreement.
(b) All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to CytRx, to the address set forth in
Section 11.8 of the Merger and
<PAGE> 36
Contribution Agreement; and (ii) if to the Shareholder, to its address shown
below its signature on the last page hereof.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement.
(e) This Agreement (including the documents and instruments referred
to herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties, except as expressly contemplated by Section 3(a).
Any assignment in violation of the foregoing shall be void.
(h) The Shareholder agrees that irreparable damage would occur and
that CytRx would not have any adequate remedy at law in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that CytRx
shall be entitled to an injunction or injunctions to prevent breaches by the
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement.
(i) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
[Remainder of page intentionally left blank.]
<PAGE> 37
IN WITNESS WHEREOF, the undersigned parties have executed and delivered this
Shareholder Voting Agreement as of the day and year first above written.
CYTRX CORPORATION
By: /s/ Jack J. Luchese
President
SHAREHOLDER:
/s/ Alphi Fund L.P.
by Philip R. Smith,
President of General Partner
Name: Alphi Fund L.P.
Address: 155 Kingston Road, Suite 360
Deerfield, Illinois 60015
Number of Shares
of Zynaxis Common Stock
Subject to Agreement: 293,900
Number of Shares
of Zynaxis Preferred Stock
Subject to Agreement: 150,000
