<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 28, 1999
NEXELL THERAPEUTICS INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-19153 06-1192468
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation.)
9 Parker, Irvine, CA 92618
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (949) 470-9011
VIMRx PHARMACEUTICALS, INC.
2751 Centerville Road, Suite 210, Wilmington, DE 19808
(Former name or former address, if changed since last report)
Item 5. Other Events.
-------------------------------------
On May 28, 1999, Nexell Therapeutics Inc. (formerly named VIMRx
Pharmaceuticals, Inc.) (the "Registrant") completed its previously announced
acquisition (the "Acquisition") of the minority interest of Baxter Healthcare
Corporation ("Baxter")--other than Baxter's right to certain milestone payments-
- -in Nexell Therapeutics Inc., the Registrant's principal business unit
("Nexell"), thereby making Nexell a wholly-owned, rather than 80.5%, subsidiary
of the Registrant. In connection with the consummation of the transaction, the
Registrant changed its name to Nexell Therapeutics Inc.
The Registrant had acquired its 80.5% of Nexell through its acquisition of
certain assets from Baxter in December 1997 in exchange for (1) 11,000,000
shares of Common Stock of the Registrant; (2) 66,304 shares of Series
<PAGE>
A Cumulative Convertible Preferred Stock ("Series A Preferred Stock") of the
Registrant with a liquidation value of $1,000 per share; (3) 19.5% of Nexell's
outstanding common stock; (4) a warrant to purchase an additional 6% of Nexell's
common stock for $6,000,000; and (5) the right to receive payments from Nexell
upon the occurrence of certain milestone events. In addition, for $30,000,000
paid to Nexell, Baxter received $30,000,000 principal amount of Nexell's 6 1/2%
convertible subordinated debentures convertible into Nexell's common stock upon
a public offering of common stock by Nexell.
The Acquisition was effected through an exchange of Baxter's interests in
Nexell for an equivalent value of interests directly in the Registrant pursuant
to an Acquisition Agreement among Baxter, the Registrant and Nexell dated
February 18, 1999 (the "Agreement"). Pursuant to the Agreement, Baxter's
interests in Nexell (common stock, warrant and convertible subordinated
debentures, but excluding its right to milestone payments) were exchanged for:
-- 3,000,000 shares of Common Stock of the Registrant;
-- an adjustment of the conversion price of the 70,282 outstanding shares
of Series A Preferred Stock owned by Baxter from $5.50 per share to
$2.75 per share, (the 3,978 share increase from the 66,304 shares
originally issued being a result of the dividends payable in kind)
which Series A Preferred Stock is convertible after June 17, 1999 into
approximately 25,557,000 shares of Common Stock of the Registrant,
subject to adjustment for stock splits and combinations, certain
dividends and distributions, and reclassification, exchange or
substitution;
-- a warrant (the "Warrant") expiring May 27, 2006 to purchase 5,200,000
shares of Common Stock at a price of $1.15 per share, subject to
adjustment from time to time in the event of cash dividends, stock
dividends, stock subdivisions, stock splits, stock combinations or
reverse stock splits; and
-- $32,884,537.50 principal amount of 6 1/2% Convertible Subordinated
Debentures (replacing the $30,000,000 principal amount of Nexell's 6
1/2% convertible subordinated debentures plus accrued interest through
the closing date of the Acquisition)
2
<PAGE>
convertible, commencing November 30, 2002, into Common Stock at a
conversion price equal to 95% of the average of the closing prices of
the Common Stock on the Nasdaq Stock Market for the 30 consecutive
trading days preceding the date of conversion. The 6 1/2% Convertible
Subordinated Debentures bear interest at 6 1/2% per annum and are due
November 30, 2004. Interest accrues until November 30, 2002, and,
together with one-third of the outstanding principal, is payable
annually commencing November 30, 2002. There are two Debentures, one
in the principal amount of approximately $22,000,000 and the other in
the principal amount of approximately $11,000,000, which are
identical, except that the $22,000,000 Debenture is convertible into
Common Stock commencing November 30, 2002 at the discretion of Baxter,
while the $11,000,000 Debenture is convertible only with the
permission of the Registrant.
The Acquisition was approved by a majority of the outstanding shares of
Common Stock of the Registrant at the Annual Meeting of Stockholders held on May
25, 1999 (the "Annual Meeting"). Following consummation of the Acquisition,
Nexell became a wholly-owned subsidiary of the Registrant, and Baxter owns
outright approximately 19.3% of the Registrant's Common Stock. Baxter's
ownership will increase to approximately 43% of the Common Stock of the
Registrant assuming exercise of the Warrant and conversion of the Series A
Preferred Stock into Common Stock on June 17, 1999, plus a further indeterminate
percentage in the event Baxter converts any portion of the 6 1/2% Convertible
Subordinated Debentures. There is a 6% dividend payable annually in kind on the
shares of Series A Preferred Stock. Accordingly, if Baxter does not convert any
shares prior to December 17, 2004, on such date it would own 99,697 shares of
Series A Preferred Stock as a result of the additional shares of Series A
Preferred Stock issued in payment of the 6% annual dividend; such 99,697 shares
would automatically convert into 36,253,345 shares of Common Stock on such date.
The Registrant and Baxter are currently negotiating definitive agreements
whereby Baxter would provide a $20 million line of credit to the Registrant or
Nexell or would provide support to the Registrant for the completion of a
private placement financing. In connection therewith, the parties also
contemplate terminating an existing Marketing, Sales and Distribution Agreement
and transferring related assets to Nexell to enable Nexell to
3
<PAGE>
assume those responsibilities directly. Under the proposed structure, Baxter
would continue to provide contract manufacturing, certain physical distribution
outside of North America, instrument placement and service, and related
functions pursuant to new agreements.
Also at the Annual Meeting, the shareholders elected four directors to the
Board, approved an increase in the number of shares of Common Stock issuable
under the Registrant's 1997 Incentive and Non-Incentive Stock Option Plan from
2,000,000 shares to 3,000,000 shares, ratified the appointment of KPMG LLP as
independent auditors of the Registrant for the year ended December 31, 1999, and
approved amendments to the Registrant's Certificate of Incorporation to (1)
change its name to Nexell Therapeutics Inc.; (2) change the terms of the
Registrant's Series A Preferred Stock as described above; (3) increase the
authorized capital stock from 120,150,000 shares to 161,150,000 shares, of which
1,000,000 shares will be a newly authorized class of "blank check" preferred
stock.
Item 7. Financial Statements and Exhibits.
---------------------------------
c. Exhibits.
2.5 Asset Acquisition Agreement dated as of February 18, 1999 among the
Registrant, Nexell and Baxter (incorporated by reference to Annex A to the
Registrant's Proxy Statement dated April 9, 1999 and filed with the
Commission on April 13, 1999 and to Exhibit 2.5 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1998).
3.1 Registrant's Amended and Restated Certificate of Incorporation dated July
10, 1990, as amended to date, including Certificate of Amendment of
Certificate of Incorporation filed with the Delaware Secretary of State on
May 25, 1999.
4.6 Registrant's Certificate of Amendment of Certificate of Incorporation
filed with the Delaware Secretary of State on May 25, 1999 modifying the
Class A Preferred Stock (included in Exhibit 3.1 above)
4.7 Registrant's Series 1 6 1/2% Convertible Subordinated Debenture Due
November 30, 2004 issued May 28, 1999 to Baxter.
4.8 Registrant's Series 2 6 1/2% Convertible Subordinated
4
<PAGE>
Debenture Due November 30, 2004 issued May 28, 1999 to Baxter.
10.39 Registrant's Common Stock Purchase Warrant issued May 28, 1999 to Baxter.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXELL THERAPEUTICS INC.
(Registrant)
By: /s/ William A. Albright
-----------------------
William A. Albright
Senior Vice President, Chief
Financial Officer and Secretary
Dated: June 23, 1999
6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Method of
No. Description Filing
- ------- ----------- ---------
<S> <C> <C>
2.5 Asset Acquisition Agreement dated as of February 18, 1999
among the Registrant, Nexell and Baxter (incorporated by
reference to Annex A to the Registrant's Proxy Statement dated
April 9, 1999 and filed with the Commission on April 13, 1999
and to Exhibit 2.5 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1998).
3.1 Registrant's Amended and Restated Certificate of Incorporation Filed herewith
dated July 10, 1990, as amended to date, including Certificate electronically
of Amendment of Certificate of Incorporation filed with the
Delaware Secretary of State on May 25, 1999.
4.6 Registrant's Certificate of Amendment of Certificate of
Incorporation filed with the Delaware Secretary of State on
May 25, 1999 modifying the Class A Preferred Stock (included
in Exhibit 3.1 above)
4.7 Registrant's Series 1 6 1/2% Convertible Subordinated Filed herewith
Debenture Due November 30, 2004 issued May 28, 1999 to Baxter. electronically
4.8 Registrant's Series 2 6 1/2% Convertible Subordinated Filed herewith
Debenture Due November 30, 2004 issued May 28, 1999 to Baxter. electronically
10.39 Registrant's Common Stock Purchase Warrant issued May 28, 1999 Filed herewith
to Baxter. electronically
</TABLE>
7
<PAGE>
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
The undersigned, the President of VIMRx PHARMACEUTICALS INC., a
Delaware corporation (the "Corporation"), does hereby execute the following
Amended and Restated Certificate of Incorporation pursuant to Sections 242(b)
and 245 of the Delaware General Corporation Law:
1. The name of the Corporation is:
VIMRx PHARMACEUTICALS INC.
2. The Corporation was originally incorporated under the name of
"Cellular Immunology Corporation" and the original Certificate of Incorporation
of the Corporation was filed in the Office of the Secretary of State of Delaware
on December 30, 1986.
3. The Certificate of Incorporation of the Corporation is hereby
amended and restated to read in its entirely as follows:
"FIRST: The name of the Corporation is:
VIMRx PHARMACEUTICALS INC.
SECOND: The address of its registered office in the State of Delaware
is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
The name of its registered agent at such address is The Corporation Trust
Company.
THIRD: The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may,
now or hereafter, be organized under the Delaware General Corporation Law
("Delaware Law").
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is Forty Million (40,000,000), all of which shall
be common stock with a par value of $.001.
FIFTH: Except to the extent otherwise specifically provided in the
Bylaws of the Corporation, the Board of Directors may adopt, amend or repeal the
Bylaws of the Corporation.
SIXTH: No election of directors of the Corporation need be by written
ballot unless the Bylaws of the Corporation so provide.
SEVENTH: The Corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the same
may be
<PAGE>
amended and supplemented, or by any successor thereto, indemnify any and all
persons whom it shall have power to indemnify under said Section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said Section. The Corporation shall advance expenses to the
fullest extent permitted by said Section. Such right to indemnification and
advancement of expenses shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person. The indemnification and
advancement of expenses provided for herein shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise.
EIGHTH: To the fullest extent that the General Corporation Law of the
State of Delaware, as it exists on the date hereof or as it may hereafter be
amended, permits the limitation or elimination of the liability of directors, no
director shall be personally liable to the Corporation or its stockholders for
any monetary damages for breach of fiduciary duty as a director.
Notwithstanding the foregoing, a director shall be liable to the extent provided
by applicable law (i) for any breach of such director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware, or (iv) for
any transaction from which such director derived an improper personal benefit.
NINTH: Neither the amendment or repeal of Articles SEVENTH or EIGHTH,
nor the adoption of any provision of this Certificate of Incorporation
inconsistent with such Articles shall adversely affect any right or protection
existing under such Articles at the time of such amendment, repeal or adoption."
4. The seven million nine hundred forty seven thousand seven hundred
twenty-four (7,947,724) shares of common stock, $.01 par value, of the
Corporation presently issued and outstanding are hereby converted and changed
into an aggregate of four million seven hundred sixty thousand four hundred
twenty-one (4,760,421) issued and outstanding shares of the new class of common
stock, $.001 par value, of the Corporation at the rate of .59896544 new shares
of $.001 par value for each outstanding share of $.01 par value, rounded up to
the next whole share with respect to the aggregate number of newly converted
shares to be issued to each holder of record of $.01 par value shares, all such
newly converted shares to be restricted from sale, assignment or transfer prior
to August 31, 1991, the certificates for such shares to be legended accordingly,
and any purported sale, assignment or transfer prior to such date to be void and
of no force or effect.
5. The foregoing amendment to the Certificate of Incorporation of the
Corporation was adopted by vote of the Board of Directors and the written
consent of the holders of a majority of the outstanding capital stock of the
Corporation in accordance with Sections 228, 242 and 245 of the Delaware Law.
Prompt notice thereof has been given to those stockholders who have not so
consented in writing, in accordance with
-2-
<PAGE>
Section 228 of the Delaware Law.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of July,
1990.
/s/ Richard F. Maradie
------------------------
Richard F. Maradie
President
Attest: /s/ Barbara Freides
---------------------
Barbara Freides
Assistant Secretary
-3-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
VIMRx Pharmaceuticals Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is VIMRx Pharmaceuticals Inc. and the
name under which the Corporation originally was incorporated is Cellular
Immunology Corporation.
2. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 30, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation as heretofore amended or supplemented, is hereby further amended by
striking out "Article FOURTH" and substituting in lieu thereof a new "Article
FOURTH" changing the authorized capital stock of the Corporation to read as
follows:
"FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is Sixty Million (60,000,000), all of
which shall be common stock with a par value of $.001."
4. The amendment to the Amended and Restated Certificate of
Incorporation, herein certified has been duly adopted in the manner and by the
vote prescribed by Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be affixed hereto and this certificate to be signed by its President and
attested by its Secretary this 12th day of June, 1993.
VIMRx PHARMACEUTICALS INC.
By /s/ Richard I. Podell
-----------------------
Richard I. Podell
President
Attest:
<PAGE>
By: /s/ Lowell S. Lifschultz
---------------------------
Lowell S. Lifschultz
Secretary
-2-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
VIMRx Pharmaceuticals Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is VIMRx Pharmaceuticals Inc. and the
name under which the Corporation originally was incorporated is "Cellular
Immunology Corporation."
2. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 30, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article IV" and
substituting in lieu thereof a new "Article IV" changing the authorized capital
stock of the Corporation to read as follows:
"FOURTH:
The authorized capitol stock of the Corporation shall consist of one
hundred twenty million (120,000,000) shares, consisting of one hundred twenty
million (120,000,000) shares of Common Stock, each having a par value of $.001
(the "Common Stock")."
4. The amendment to the Certificate of Incorporation herein certified
has been duly adopted in the manner and by the vote prescribed by Section 242 of
the General Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be affixed hereto and this certificate to be signed by a duly authorized officer
of the Corporation and attested by its Secretary this 20th day of June, 1996.
VIMRx PHARMACEUTICALS INC.
By: /s/ Richard L. Dunning
----------------------
Richard L. Dunning
President and Chief Executive Officer
Attest:
By: /s/ Lowell S. Lifschultz
------------------------
Lowell S. Lifschultz
Secretary
-2-
<PAGE>
CERTIFICATE OF CHANGE OF REGISTERED AGENT
and
REGISTERED OFFICE
VIMRx PHARMACEUTICALS INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
The present registered agent of the corporation is The Corporation
Trust Company and the present registered office of the corporation is in the
county of New Castle.
The Board of Directors of VIMRx PHARMACEUTICALS INC. adopted the
following resolution on the 6th of February, 1997.
RESOLVED, that the registered office of the Corporation in the State
of Delaware be and it hereby is changed to 2751 Centerville Road in
the City of Wilmington, County of New Castle and the authorization of
the present registered agent of this corporation be and the same is
hereby withdrawn, and VIMRx PHARMACEUTICAL INC. shall be and is hereby
constituted and appointed the registered agent of this corporation at
the above address of its registered office.
IN WITNESS WHEREOF, VIMRx PHARMACEUTICALS INC. has caused this statement to be
signed by Richard L. Dunning, its President this 10th day of March, 1997.
By: /s/ Richard L. Dunning
----------------------
Richard L. Dunning
President
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIMRx PHARMACEUTICALS INC.
----------------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
----------------------------------------
VIMRx Pharmaceuticals Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is VIMRx Pharmaceuticals Inc. and the
name under which the Corporation originally was incorporated was "Cellular
Immunology Corporation."
2. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 13, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation, as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article IV" and
substituting in lieu thereof a new "Article IV" changing the authorized capital
stock of the Corporation to read as follows:
"FOURTH:
A. The authorized capital stock of the Corporation shall consist of one
hundred twenty million one hundred fifty thousand (120,150,000) shares,
consisting of one hundred twenty million (120,000,000) shares of Common Stock,
each having a par value of $.001 (the "Common Stock"), and one hundred fifty
thousand (150,000) shares of Preferred Stock, each having a par value of $.001
(the "Preferred Stock").
B. The Board of Directors hereby creates and establishes and authorizes
the issuance of a first series of preferred stock, such series to consist of
150,000 shares of this Corporation's authorized and unissued Preferred Stock,
each share having a par value of $.001, and the Board of Directors hereby fixes
the designation of such series as "Series A Cumulative Convertible Preferred
Stock" (hereinafter referred to as the "Preferred Stock") and fixes the number
of shares constituting such series at 150,000, and hereby determines the powers,
preferences, rights, qualifications, limitations and restrictions of such series
as follows:
Section 1.
Dividends
(a) The holders of the Preferred Stock shall be entitled to receive
dividends thereon at the rate of 6% of the Liquidation Preference (as defined in
Section 2) per share per annum, (as
<PAGE>
adjusted for any combinations, consolidations, stock distributions or stock
dividends with respect to such shares) as and when declared by the Board of
Directors, before any dividend or distribution shall be declared, set apart for,
or paid upon the Common Stock of the Corporation, which dividend shall be
payable in additional shares of Preferred Stock, each valued at their
Liquidation Preference. The dividends on the Preferred Stock shall be
cumulative, so that if the Corporation fails in any fiscal year to pay such
dividends on all of the issued and outstanding Preferred Stock, such deficiency
in the dividends shall be fully paid before any dividends or distributions shall
be paid on or set apart for the Common Stock. All dividends and distributions on
the Preferred Stock shall be made pro rata per share to all holders of Preferred
Stock; provided, however, that, notwithstanding the foregoing, until all
cumulative dividends on the Preferred Stock shall have been fully paid, all
dividends and distributions on the Preferred Stock shall be made ratably to the
holders thereof in proportion to the respective amounts that would be payable on
such shares if such dividend arrearages were paid in full. Such dividends shall
accrue annually on the anniversary of the Original Issuance Date (as defined in
Section 3(d)).
(b) For purposes of this Section 1, unless the context requires otherwise,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by employees or directors of, or consultants to, the Corporation upon
termination of their employment or services pursuant to agreements providing for
such repurchase and other than redemptions in liquidation or dissolution of the
Corporation) for cash or property, including any such transfer, purchase or
redemption by a subsidiary of the Corporation.
Section 2.
Liquidation Rights
(a) Treatment at Liquidation, Dissolution or Winding Up.
(i) Except as otherwise provided in Section 2(b) below, in the event
of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of Preferred Stock shall be
entitled to be paid first out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes,
before payment or distribution of any of such assets to the holders of any other
class of the corporation's capital stock, an amount equal to $1,000 per share of
Preferred Stock (the "Liquidation Preference,") which amount shall be subject to
equitable adjustment whenever there shall occur a stock dividend, stock split,
combination of shares, reclassification or other similar event affecting such
shares), and shall include any accrued but unpaid dividends.
(ii) After payment shall have been made in full to the holders of
Preferred Stock pursuant to Section 2(a)(i) hereof or funds necessary for such
payment shall have been set aside by the Corporation in trust for the account of
the holders of Preferred Stock to be available for such payment, the remaining
assets of the Corporation shall be distributed ratably to the holders of Common
Stock to the exclusion of the Preferred Stock.
(iii) If the assets of the Corporation shall be insufficient to permit
the payment in full to the holders of Preferred Stock of all amounts
distributable to them under Section 2(a)(i) hereof, then the entire assets of
the Corporation available for such distribution
2
<PAGE>
shall be distributed ratably among the holders of Preferred Stock in proportion
to the full preferential amount each such holder is otherwise entitled to
receive.
(b) Treatment of Reorganizations, Consolidations, Mergers and Sales of
Assets. A consolidation or merger of the Corporation with or into another
unaffiliated corporation or a sale of all or substantially all of the assets of
the Corporation, shall not be regarded as a liquidation, dissolution or winding
up of the affairs of the Corporation for purposes of this Section 2, but shall
result in conversion of the Preferred Stock into Common Stock as set forth in
Section 3(c).
(c) Distributions Other Than Cash. The value of any distribution provided
for in this Section 2, or portion thereof, payable in property other than cash
shall be the fair value (as determined by the Board of Directors in good faith)
of such property at the time of such distribution.
Section 3.
Conversion
The holders of Preferred Stock shall have conversion rights (the
"Conversion Rights") and the Preferred Stock shall be subject to conversion, as
follows:
(a) Right to Convert; Conversion Price. Each share of Preferred Stock shall
be convertible, without the payment of any additional consideration by the
holder thereof and at the option of the holder thereof, at any time after
eighteen (18) months after the Original Issuance Date (as defined in Section
3(d) below), at the office of the Corporation or any transfer agent for the
Preferred Stock, into such whole number of fully paid and nonassessable shares
of Common Stock as is determined by dividing $1,000 by the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. The
Conversion Price at which shares of Common Stock shall be deliverable upon
conversion without the payment of any additional consideration by the holder of
Preferred Stock (the "Conversion Price") shall initially be the highest average
of closing bid prices per share of Common Stock on the principal market on which
such Common Stock trades for any sixty (60) consecutive trading day period
commencing with the Original Issuance Date and ending on the date which is
eighteen (18) months from such date, but in no event shall such Conversion Price
be less than $5.50 or greater than $7.50. Such initial Conversion Price shall be
subject to adjustment, in order to adjust the number of shares of Common Stock
into which Preferred Stock is convertible, as hereinafter provided. The right of
conversion with respect to any shares of Preferred Stock which the Corporation
redeems pursuant to Section 5(a) hereof shall terminate at the close of business
on the Redemption Date (as defined in Section 5 of this Certificate of
Designations), unless the Corporation shall default in the payment of the
redemption price for such shares of Preferred Stock, in which case such
termination shall occur upon payment of the redemption price of such shares.
(b) Mechanics of Conversion; Dividends; Fractional Shares. Before any
holder of Preferred Stock shall be entitled to convert the same into shares of
Common Stock, such holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Preferred Stock, and shall give written notice to the Corporation
at such office that such holder elects to convert the same. At the time of each
conversion of shares of Preferred Stock, the Corporation shall also issue shares
of Common Stock in an amount equal to all dividends declared and unpaid on the
shares of Preferred Stock surrendered for conversion to the date upon which such
conversion is deemed to occur, valued at
3
<PAGE>
the Conversion Price. In lieu of any fractional shares of Common Stock to which
the holder would otherwise be entitled, the Corporation shall pay cash equal to
such fraction multiplied by the then effective Conversion Price. The Corporation
shall, as soon as practicable thereafter, issue and deliver at such office to
such holder of Preferred Stock, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled as aforesaid,
together with cash in lieu of any fraction of a share. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on such date.
(c) Automatic Conversion.
(i) Each share of Preferred Stock shall automatically be converted
into shares of Common Stock at the then effective Conversion Price:
(1) on the date which is seven (7) years after the Original
Issuance Date; or
(2) immediately prior to the effective time of any merger, sale
of assets, reorganization or like event in which the Corporation is not the
surviving entity (if such event occurs prior to eighteen months from the
Original Issuance Date, then the Conversion Price shall be equal to the fair
value of the consideration to be received by the holder of a share of Common
Stock, as determined in good faith by the Corporation's Board of Directors, but
in no event greater than $7.50), or
(3) upon the written election of the holders of not less than a
majority in voting power of the then outstanding shares of Preferred Stock to
require such mandatory conversion.
(ii) Upon the occurrence of an event specified in Section 3(c)(i)
hereof, all shares of Preferred Stock shall be converted automatically without
any further action by any holder of such shares and whether or not the
certificate(s) representing such shares are surrendered to the Corporation or
the transfer agent for the Preferred Stock; provided, however, that the
Corporation shall not be obligated to issue a certificate or certificates
evidencing the shares of Common Stock issuable upon such conversion unless the
certificate(s) evidencing such shares of Preferred Stock being converted are
either delivered to the Corporation or the transfer agent for the Preferred
Stock, or the holder notifies the Corporation or such transfer agent that such
certificate or certificates have been lost, stolen, or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection therewith ("Indemnity Agreement"), except that
such holder shall not be required to provide any indemnity bond. Upon the
automatic conversion of Preferred Stock, each holder of Preferred Stock shall
surrender the certificate(s) representing such holder's shares of Preferred
Stock or the aforesaid Indemnity Agreement at the office of the Corporation or
of the transfer agent for the Preferred Stock. Thereupon, there shall be issued
and delivered to such holder, promptly at such office and in such holder's name
as shown on such surrendered certificate(s), a certificate or certificates for
the number of shares of Common Stock into which the shares of Preferred Stock
surrendered were convertible on the date on which such automatic conversion
occurred. No fractional shares of Common Stock shall be issued upon the
automatic conversion of Preferred Stock. In lieu of any fractional shares of
Common Stock to which the holder would
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<PAGE>
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then effective Conversion Price.
(d) Adjustment for Stock Splits and Combinations. If the Corporation shall
at any time or from time to time after the date on which shares of the Preferred
Stock are first issued (the "Original Issuance Date") effect a subdivision of
the outstanding Common Stock, the Conversion Price in effect immediately before
that subdivision shall be proportionately decreased. If the Corporation shall at
any time or from time to time after the Original Issuance Date combine the
outstanding shares of Common Stock, the Conversion Price in effect immediately
before the combination shall be proportionately increased. Any adjustment under
this paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(e) Adjustment for Certain Dividends and Distributions.
(1) In the event the Corporation at any time or from time to time
after the Original Issuance Date shall make or issue, or fix a record date for
the determination of holders of Common Stock entitled to receive a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event the Conversion Price then in effect shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Conversion
Price then in effect by a fraction:
(A) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
(B) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the number of shares
of Common Stock issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(2) For the purposes of Section 3(e)(1) hereof, the total number of
shares of Common Stock deemed to be issued and outstanding shall include (i) all
shares of Common Stock issuable on conversion of all shares of Preferred Stock
outstanding and (ii) all shares of Common Stock issued and outstanding and
entitled to receive such dividend.
(f) Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time or from time to time after the Original Issuance Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, including a
cash dividend, then and in each such event provision shall be made so that the
holders of Preferred Stock shall receive upon conversion thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Corporation
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<PAGE>
and/or cash that they would have received had their Preferred Stock been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period, giving application to all adjustments called for herein during such
period.
(g) Adjustment for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon the conversion of the Preferred Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or sale of assets provided
for in Section 3(c), then and in each such event the holder of each such share
of Preferred Stock shall have the right thereafter to convert such share into
the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or other change, by
holders of the number of shares of Common Stock into which such shares of
Preferred Stock might have been converted immediately prior to such
reorganization, reclassification, or change, all subject to further adjustment
as provided herein.
(h) [INTENTIONALLY OMITTED]
(i) Adjustment of Conversion Price Upon Issuance of Additional Shares of
Common Stock.
(1) Subject always to Section 3(i)(5), in the event that at any time
or from time to time after the Original Issuance Date, through and including the
date which ends eighteen (18) months after the Original Issuance Date, but not
thereafter, the corporation shall issue any shares of Common Stock or securities
convertible into or exercisable to purchase shares of Common Stock ("Additional
Shares of Common Stock") excluding shares issued upon a stock split or
combination as provided in Section 3(d) or as a dividend or distribution as
provided in Sections 3(e) or (f)), without consideration or for a consideration
per share less than the Conversion Price in effect on the date of, and
immediately prior to, the issuance or deemed issuance of such Additional Shares
of Common Stock, (which shall include the assumed conversion of all convertible
securities and the assumed exercise of all convertible securities or rights to
purchase shares of Common Stock in accordance with the terms of such convertible
securities or rights to purchase Common Stock), then and in such event, the
applicable Conversion Price then in effect shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Conversion Price by a fraction:
(A) the numerator of which shall be (x) the number of shares of
Common Stock outstanding immediately prior to such issue plus (y) the number of
shares of Common Stock which the aggregate consideration received or deemed to
have been received by the corporation for the total number of Additional Shares
of Common Stock so issued would purchase at the Conversion Price in effect on
the date of, and immediately prior to, the issuance or deemed issuance of such
Additional Shares of Common Stock, and
(B) the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issue plus the number of such
Additional Shares of Common Stock so issued or deemed to be issued.
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(2) For the purposes of Section 3(i) (1) hereof, all shares of Common
Stock issuable upon conversion of shares of Preferred Stock outstanding
immediately prior to any issue of Additional Shares of Common Stock, or any
event with respect to which Additional Shares of Common Stock shall be deemed to
be issued, shall be deemed to be outstanding; and immediately after any
Additional Shares of Common Stock are deemed issued pursuant to Section 3(i)(l)
such Additional Shares of Common Stock shall be deemed to be outstanding.
(3) Notwithstanding anything to the contrary contained herein, the
applicable Conversion Price in effect at the time Additional Shares of Common
Stock are issued or deemed to be issued shall not be reduced pursuant to Section
3(i)(1) hereof at such time if the amount of such reduction would be an amount
less than $. 01, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $.01 or more.
(4) Determination of Consideration. For purposes of this Section 3(i)
, the consideration received by the Corporation for the issue of any Additional
Shares of Common Stock shall be computed as follows:
(i) Cash and Property: Such consideration shall:
(A) insofar as it consists of cash, be computed at the
aggregate amounts of cash received by the Corporation, excluding amounts
paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than cash, be
computed at the fair value thereof at the time of such issue, as determined
in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B)
above, as determined in good faith by the Board of Directors.
(ii) Options and Convertible Securities. The consideration per
share received by the Corporation for Additional Shares of Common Stock deemed
to have been issued pursuant to Section 3(i)(1) , relating to options, warrants
or rights to purchase Common Stock, and convertible securities, shall be
determined by dividing (W) the total amount, if any, received or receivable by
the Corporation as consideration for the issue of such options or convertible
securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such options or the conversion or exchange
of such convertible securities, or in the case of options for convertible
securities, the exercise of such options for convertible securities and the
conversion or exchange of such convertible securities, by (X) the maximum number
of shares of Common Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such options or the conversion or
exchange of such convertible securities. (5)Notwithstanding any other provision
of this Section 3(i), there shall be no deemed issuance of Additional Shares
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<PAGE>
of Common Stock upon (A) issuance of any shares of Preferred Stock as a dividend
on the Preferred Stock, (B) conversion of any Preferred Stock, (C) exercise of
any options or warrants issued and outstanding on the Original Issuance Date,
(D) grant or exercise of any options to purchase Common Stock pursuant to the
Corporation's Stock Option Plan as in effect on the Original Issuance Date or
any subsequent amendment thereof which is approved by the Corporation's
stockholders pursuant to Securities and Exchange Commission regulations, or (E)
the sale for cash of no more than 3,333,334 shares of Common Stock for aggregate
gross proceeds of no more than $10,000,000, at a gross per-share price of no
less than $3.00. In the event that the gross per-share sale price of a share of
Common Stock under Section 3(i)(5)(E) shall be less than $3.00, then the
difference between $3.00 and the actual gross per- share sale price shall be
subtracted from the Conversion Price utilized in the calculation set forth in
Section 3(i)(1)(A)(y).
(j) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Conversion Price pursuant to this Section 3, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each affected
holder of Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any affected holder of Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of each share of Preferred
Stock.
(k) Notices of Record Date. In the event of any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the Corporation shall mail to each holder of
Preferred Stock at least ten (10) days prior to such record date a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.
(l) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all Preferred Stock.
(m) Certain Taxes. The Corporation shall pay any issue or transfer taxes
payable in connection with the conversion of any shares of Preferred Stock;
provided, however, that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer to a name other than that of the
holder of such Preferred Stock.
Section 4.
Voting Rights
Except as otherwise required by law or by Section 7, the holders of
Preferred Stock shall not have the right to vote on any matter submitted to a
vote of the stockholders of the Corporation. With respect to all questions as to
which, under law, stockholders are entitled to vote by classes, the holders of
Preferred Stock shall vote together as a single class separately from the
holders of Common Stock.
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<PAGE>
Section 5.
No Reissuance Preferred Stock
No share or shares of Preferred Stock acquired by the Corporation by reason
of redemption, purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue.
Section 6.
Protective Covenant
The Corporation shall not, without the affirmative vote or written consent
of the holders of a majority of the then issued and outstanding shares of
Preferred Stock, amend its Certificate of Incorporation to provide for the
creation or issuance of any class or series of capital stock which shall rank
pari passu or senior to the Preferred Stock in priority to receive the
liquidation preference on the Preferred Stock."
4. The amendment to the Certificate of Incorporation herein certified has
been duly adopted in the manner and by the vote prescribed by Section 242 of the
General Corporation Law of the State of Delaware.
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<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Richard L. Dunning, its President, and attested by Lowell S.
Lifschultz, its Secretary, as of this 16th day of December, 1997.
VIMRx PHARMACEUTICALS INC.
By: /s/ Richard L. Dunning
-------------------------------------------
Richard L. Dunning
President and Chief Executive Officer
Attest:
By: /s/ Lowell S. Lifschultz
--------------------------
Lowell S. Lifschultz
Secretary
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
VIMRX PHARMACEUTICALS INC.
============================================
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
==============================================
VIMRX Pharmaceuticals Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is VIMRX Pharmaceuticals Inc. and the
name under which the Corporation originally was incorporated was "Cellular
Immunology Corporation."
2. The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of Delaware on December 13, 1986.
3. The Amended and Restated Certificate of Incorporation of the
Corporation, as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article I" and
substituting in lieu thereof a new "Article I" changing the name of the
Corporation to read as follows:
"FIRST: The name of the Corporation is:
Nexell Therapeutics Inc."
4. The Amended and Restated Certificate of Incorporation of the
Corporation, as heretofore amended or supplemented (the "Certificate of
Incorporation"), is hereby further amended by striking out "Article IV" and
substituting in lieu thereof a new "Article IV" changing the authorized capital
stock of the Corporation to read as follows:
"FOURTH
A. The authorized capital stock of the Corporation shall consist of one
hundred sixty-one million, one hundred fifty thousand (161,150,000) shares,
consisting of one hundred sixty million (160,000,000) shares of Common Stock,
each having a par value of $.001 (the "Common Stock"), and one million, one
hundred fifty thousand (1,150,000) shares of Preferred Stock, each having a par
value of $.001 (the "Preferred Stock").
B. The Preferred Stock may be issued from time to time in one or more
series of any number of shares, provided that the aggregate number of shares
issued and not canceled of any and all such series shall not exceed the total
number of shares of Preferred Stock hereinabove authorized. Each series of
Preferred Stock shall be distinctively designated by letter
<PAGE>
or descriptive words. All series of Preferred Stock shall rank equally and be
identical in all respects except as provided by this Article FOURTH or in a
resolution of the Board of Directors providing for the issuance of any series of
Preferred Stock.
C. Authority is hereby expressly vested in the Board of Directors from
time to time to issue the Preferred Stock as Preferred Stock of any series and
in connection with the creation of each such series to fix by the resolution or
resolutions providing for the issue of shares thereof the designations,
preferences, limitations and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, to the full
extent now or hereafter permitted by this Certificate of Incorporation and the
laws of the State of Delaware, including, without limitation:
(1) the distinctive designation of such series and the number of
shares which shall constitute such series, which number may be increased (but
not above the total number of authorized shares of the Preferred Stock) or
decreased (but not below the number of shares thereof then outstanding) from
time to time by a resolution or resolutions of the Board of Directors, all
subject to the conditions or restrictions set forth in the resolution or
resolutions adopted by the Board of Directors providing for the issuance of any
series of Preferred Stock;
(2) the dividend rate payable on shares of such series, the
conditions and dates upon which such dividends shall be payable, the preferences
or relation which such dividend shall bear to the dividends payable on any other
class or classes or any other series of capital stock (except as otherwise
expressly provided in this Certificate of Incorporation), and whether such
dividends shall be cumulative or non-cumulative and, if cumulative, the date or
dates from which dividends shall accumulate;
(3) whether the shares of such series shall be subject to redemption
by the Corporation and, if made subject to redemption, the price or prices at
which, and the terms and conditions on which, the shares of such series may be
redeemed by the Corporation;
(4) the amount or amounts payable upon the shares of such series in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Corporation and the preferences or relation which such payments shall
bear to such payments made on any other class or classes or any other series of
capital stock (except as otherwise expressly provided in this Certificate of
Incorporation);
(5) whether or not the shares of such series shall be made
convertible into, or exchangeable for, shares of any other class or classes of
capital stock of the Corporation, or any series thereof, or for any other series
of the same class of capital stock of the Corporation or for debt of the
Corporation evidenced by an instrument of indebtedness, and, if so convertible
or exchangeable, the conversion price or prices, or the rate or rates of
exchange, and the adjustments thereof, if any, at which such conversion or
exchange may be made, and any other terms and conditions of such conversion or
exchange;
(6) whether the holders of shares of such series shall have any right
or power to vote or to receive notice of any meeting of stockholders, either
generally or as a condition to specified corporate action; and
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(7) any other preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions thereof as
may be permitted by the laws of the State of Delaware and as shall not be
inconsistent with this Article FOURTH.
D. Shares of Preferred Stock which have been issued and reacquired in any
manner by the Corporation (excluding, until the Corporation elects to retire
them, shares which are held as treasury shares, but including shares redeemed,
shares purchased and retired and shares which have been converted into shares of
Common Stock) shall have the status of authorized but unissued shares of
Preferred Stock and may be reissued as a part of the series of which they were
originally a part or may be reissued as a part of another series of Preferred
Stock, all subject to the conditions or restrictions on issuance set forth in
the resolution or resolutions adopted by the Board of Directors providing for
the issuance of any series of Preferred Stock.
E. Except as otherwise provided by the resolution or resolutions
providing for the issuance of any series of Preferred Stock, or in subsection H
of this Article FOURTH, after payment shall have been made to the holders of
Preferred Stock of the full amount of dividends to which they shall be entitled
pursuant to the resolution or resolutions providing for the issuance of any
series of Preferred Stock, the holders of Common Stock shall be entitled, to the
exclusion of the holders of Preferred Stock of any and all series, to receive
such dividends as from time to time may be declared by the Board of Directors.
F. Except as otherwise provided by the resolution or resolutions
providing for the issuance of any series of Preferred Stock, in the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made to the holders of Preferred
Stock of the full amounts to which they shall be entitled pursuant to the
resolution or resolutions providing for the issuance of any series of Preferred
Stock, the holders of Common Stock shall be entitled, to the exclusion of the
holders of Preferred Stock of any and all series, to share, ratably according to
the number of shares of Common Stock held by them, in all remaining assets of
the Corporation available for distribution to its stockholders.
G. The holders of Preferred Stock shall not have any preemptive rights
except to the extent such rights shall be specifically provided for in the
resolution or resolutions providing for the issuance thereof adopted by the
Board of Directors.
H. The Board of Directors hereby creates and establishes and authorizes
the issuance of a first series of preferred stock, such series to consist of
150,000 shares of this Corporation's authorized and unissued Preferred Stock,
each share having a par value of $.001, and the Board of Directors hereby fixes
the designation of such series as "Series A Cumulative Convertible Preferred
Stock" (hereinafter referred to as the "Series A Preferred Stock") and fixes the
number of shares constituting such series at 150,000, and hereby determines the
powers, preferences, rights, qualifications, limitations and restrictions of
such series as follows:
SECTION 1.
DIVIDENDS
(a) The holders of the Series A Preferred Stock shall be entitled to
receive dividends thereon at the rate of 6% of the Liquidation Preference (as
defined in Section 2) per share per annum, (as adjusted for any combinations,
consolidations, stock distributions or stock dividends with respect to such
shares) as and when declared by the Board of Directors, before any dividend
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<PAGE>
or distribution shall be declared, set apart for, or paid upon the Common Stock
of the Corporation, which dividend shall be payable in additional shares of
Series A Preferred Stock, each valued at their Liquidation Preference. The
dividends on the Series A Preferred Stock shall be cumulative, so that if the
Corporation fails in any fiscal year to pay such dividends on all of the issued
and outstanding Series A Preferred Stock, such deficiency in the dividends shall
be fully paid before any dividends or distributions shall be paid on or set
apart for the Common Stock. All dividends and distributions on the Series A
Preferred Stock shall be made pro rata per share to all holders of Series A
Preferred Stock; provided, however, that, notwithstanding the foregoing, until
all cumulative dividends on the Series A Preferred Stock shall have been fully
paid, all dividends and distributions on the Series A Preferred Stock shall be
made ratably to the holders thereof in proportion to the respective amounts that
would be payable on such shares if such dividend arrearages were paid in full.
Such dividends shall accrue annually on the anniversary of the Original Issuance
Date (as defined in Section 3(d)).
(b) For purposes of this Section 1, unless the context requires otherwise,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by employees or directors of, or consultants to, the Corporation upon
termination of their employment or services pursuant to agreements providing for
such repurchase and other than redemptions in liquidation or dissolution of the
Corporation) for cash or property, including any such transfer, purchase or
redemption by a subsidiary of the Corporation.
SECTION 2.
LIQUIDATION RIGHTS
(a) Treatment at Liquidation, Dissolution or Winding Up.
(i) Except as otherwise provided in Section 2(b) below, in the event
of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of Series A Preferred Stock shall
be entitled to be paid first out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes,
before payment or distribution of any of such assets to the holders of any other
class of the corporation's capital stock, an amount equal to $1,000 per share of
Series A Preferred Stock (the "Liquidation Preference"), which amount shall be
subject to equitable adjustment whenever there shall occur a stock dividend,
stock split, combination of shares, reclassification or other similar event
affecting such shares), and shall include any accrued but unpaid dividends.
(ii) After payment shall have been made in full to the holders of
Series A Preferred Stock pursuant to Section 2(a)(i) hereof or funds necessary
for such payment shall have been set aside by the Corporation in trust for the
account of the holders of Series A Preferred Stock to be available for such
payment, the remaining assets of the Corporation shall be distributed ratably to
the holders of Common Stock to the exclusion of the Series A Preferred Stock.
(iii) If the assets of the Corporation shall be insufficient to
permit the payment in full to the holders of Series A Preferred Stock of all
amounts distributable to them under Section 2(a)(i) hereof, then the entire
assets of the Corporation available for such
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<PAGE>
distribution shall be distributed ratably among the holders of Series A
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive.
(b) Treatment of Reorganizations, Consolidations, Mergers and Sales of
Assets. A consolidation or merger of the Corporation with or into another
unaffiliated corporation or a sale of all or substantially all of the assets of
the Corporation, shall not be regarded as a liquidation, dissolution or winding
up of the affairs of the Corporation for purposes of this Section 2, but shall
result in conversion of the Series A Preferred Stock into Common Stock as set
forth in Section 3(c).
(c) Distributions Other Than Cash. The value of any distribution provided
for in this Section 2, or portion thereof, payable in property other than cash
shall be the fair value (as determined by the Board of Directors in good faith)
of such property at the time of such distribution.
SECTION 3.
CONVERSION
The holders of Series A Preferred Stock shall have conversion rights (the
"Conversion Rights") and the Series A Preferred Stock shall be subject to
conversion, as follows:
(a) Right to Convert; Conversion Price. Each share of Series A Preferred
Stock shall be convertible, without the payment of any additional consideration
by the holder thereof and at the option of the holder thereof, at any time after
June 17, 1999, at the office of the Corporation or any transfer agent for the
Series A Preferred Stock, into such whole number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $1,000 by the Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
The Conversion Price at which shares of Common Stock shall be deliverable upon
conversion without the payment of any additional consideration by the holder of
Series A Preferred Stock (the "Conversion Price") shall initially be $2.75. Such
initial Conversion Price shall be subject to adjustment, in order to adjust the
number of shares of Common Stock into which Series A Preferred Stock is
convertible, as hereinafter provided. The right of conversion with respect to
any shares of Series A Preferred Stock which the Corporation redeems pursuant to
Section 5(a) hereof shall terminate at the close of business on the Redemption
Date (as defined in Section 5 of this Certificate of Designations), unless the
Corporation shall default in the payment of the redemption price for such shares
of Series A Preferred Stock, in which case such termination shall occur upon
payment of the redemption price of such shares.
(b) Mechanics of Conversion; Dividends; Fractional Shares. Before any
holder of Series A Preferred Stock shall be entitled to convert the same into
shares of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series A Preferred Stock, and shall give written notice
to the Corporation at such office that such holder elects to convert the same.
At the time of each conversion of shares of Series A Preferred Stock, the
Corporation shall also issue shares of Common Stock in an amount equal to all
dividends declared and unpaid on the shares of Series A Preferred Stock
surrendered for conversion to the date upon which such conversion is deemed to
occur, valued at the Conversion Price. In lieu of any fractional shares of
Common Stock to which the holder would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the then effective
Conversion Price. The Corporation shall, as soon as practicable
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<PAGE>
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock, a certificate or certificates for the number of shares of
Common Stock to which such holder shall be entitled as aforesaid, together with
cash in lieu of any fraction of a share. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of such
surrender of the shares of Series A Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on such date.
(c) Automatic Conversion.
(i) Each share of Series A Preferred Stock shall automatically be
converted into shares of Common Stock at the then effective Conversion Price on
the earliest of:
(1) December 17, 2004; or
(2) immediately prior to the effective time of any merger, sale
of assets, reorganization or like event in which the Corporation is not the
surviving entity (if such event occurs prior to June 17, 1999, then the
Conversion Price shall be equal to the fair value of the consideration to be
received by the holder of a share of Common Stock, as determined in good faith
by the Corporation's Board of Directors, but in no event greater than $2.75), or
(3) upon the written election of the holders of not less than a
majority in voting power of the then outstanding shares of Series A Preferred
Stock to require such mandatory conversion.
(ii) Upon the occurrence of an event specified in Section 3(c)(i)
hereof, all shares of Series A Preferred Stock shall be converted automatically
without any further action by any holder of such shares and whether or not the
certificate(s) representing such shares are surrendered to the Corporation or
the transfer agent for the Series A Preferred Stock; provided, however, that the
Corporation shall not be obligated to issue a certificate or certificates
evidencing the shares of Common Stock issuable upon such conversion unless the
certificate(s) evidencing such shares of Series A Preferred Stock being
converted are either delivered to the Corporation or the transfer agent for the
Series A Preferred Stock, or the holder notifies the Corporation or such
transfer agent that such certificate or certificates have been lost, stolen, or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation from any loss incurred by it in connection therewith ("Indemnity
Agreement"), except that such holder shall not be required to provide any
indemnity bond. Upon the automatic conversion of Series A Preferred Stock, each
holder of Series A Preferred Stock shall surrender the certificate(s)
representing such holder's shares of Series A Preferred Stock or the aforesaid
Indemnity Agreement at the office of the Corporation or of the transfer agent
for the Series A Preferred Stock. Thereupon, there shall be issued and delivered
to such holder, promptly at such office and in such holder's name as shown on
such surrendered certificate(s), a certificate or certificates for the number of
shares of Common Stock into which the shares of Series A Preferred Stock
surrendered were convertible on the date on which such automatic conversion
occurred. No fractional shares of Common Stock shall be issued upon the
automatic conversion of Series A Preferred Stock. In lieu of any fractional
shares of Common Stock to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Conversion Price.
6
<PAGE>
(d) Adjustment for Stock Splits and Combinations. If the Corporation shall
at any time or from time to time after December 17, 1997 (the "Original Issuance
Date") effect a subdivision of the outstanding Common Stock, the Conversion
Price in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
Original Issuance Date combine the outstanding shares of Common Stock, the
Conversion Price in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(e) Adjustment for Certain Dividends and Distributions.
(1) In the event the Corporation at any time or from time to time
after the Original Issuance Date shall make or issue, or fix a record date for
the determination of holders of Common Stock entitled to receive a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event the Conversion Price then in effect shall be decreased as of the
time of such issuance or, in the event such a record date shall have been fixed,
as of the close of business on such record date, by multiplying the Conversion
Price then in effect by a fraction:
(A) the numerator of which shall be the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date, and
(B) the denominator of which shall be the total number of shares
of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date plus the number
of shares of Common Stock issuable in payment of such dividend or
distribution;
provided, however, if such record date shall have been fixed and such dividend
is not fully paid or such distribution is not fully made on the date fixed
therefor, the Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such
dividends or distributions.
(2) For the purposes of Section 3(e)(1) hereof, the total number of
shares of Common Stock deemed to be issued and outstanding shall include (i) all
shares of Common Stock issuable on conversion of all shares of Series A
Preferred Stock outstanding and (ii) all shares of Common Stock issued and
outstanding and entitled to receive such dividend.
(f) Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time or from time to time after the Original Issuance Date
shall make or issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, including a
cash dividend, then and in each such event provision shall be made so that the
holders of Series A Preferred Stock shall receive upon conversion thereof in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities of the Corporation and/or cash that they would have
received had their Series A Preferred Stock been converted into Common Stock on
the date of such event and had they thereafter, during the period from the date
of such event to and including the conversion date, retained such securities
7
<PAGE>
receivable by them as aforesaid during such period, giving application to all
adjustments called for herein during such period.
(g) Adjustment for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon the conversion of the Series A Preferred Stock shall
be changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for above, or a reorganization, merger, consolidation, or sale of assets
provided for in Section 3(c), then and in each such event the holder of each
such share of Series A Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification,
or other change, by holders of the number of shares of Common Stock into which
such shares of Series A Preferred Stock might have been converted immediately
prior to such reorganization, reclassification, or change, all subject to
further adjustment as provided herein.
(h) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Conversion Price pursuant to this Section 3, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each affected
holder of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any affected holder of Series A Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, (ii) the Conversion Price at the time in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of each share of Series
A Preferred Stock.
(i) Notices of Record Date. In the event of any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the Corporation shall mail to each holder of
Series A Preferred Stock at least ten (10) days prior to such record date a
notice specifying the date on which any such record is to be taken for the
purpose of such dividend or distribution.
(j) Common Stock Reserved. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all Series A Preferred Stock.
(k) Certain Taxes. The Corporation shall pay any issue or transfer taxes
payable in connection with the conversion of any shares of Series A Preferred
Stock; provided, however, that the Corporation shall not be required to pay any
tax that may be payable in respect of any transfer to a name other than that of
the holder of such Series A Preferred Stock.
8
<PAGE>
SECTION 4.
VOTING RIGHTS
Except as otherwise required by law or by Section 7, the holders of Series
A Preferred Stock shall not have the right to vote on any matter submitted to a
vote of the stockholders of the Corporation. With respect to all questions as to
which, under law, stockholders are entitled to vote by classes, the holders of
Series A Preferred Stock shall vote together as a single class separately from
the holders of Common Stock.
SECTION 5.
NO REISSUANCE OF SERIES A PREFERRED STOCK
No share or shares of Series A Preferred Stock acquired by the Corporation
by reason of redemption, purchase, conversion or otherwise shall be reissued,
and all such shares shall be canceled, retired and eliminated from the shares
which the Corporation shall be authorized to issue.
SECTION 6.
PROTECTIVE COVENANT
The Corporation shall not, without the affirmative vote or written consent
of the holders of a majority of the then issued and outstanding shares of Series
A Preferred Stock, amend its Certificate of Incorporation or adopt a resolution
of the Board of Directors to provide for the creation or issuance of any class
or series of capital stock which shall rank pari passu or senior to the Series A
Preferred Stock in priority to receive the liquidation preference on the Series
A Preferred Stock."
5. The amendment to the Certificate of Incorporation herein
certified has been duly adopted in the manner and by the vote prescribed by
Section 242 of the General Corporation Law of the State of Delaware.
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<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this certificate signed by its President and Chief Executive
Officer and attested by its Secretary this 25th day of May, 1999.
VIMRX PHARMACEUTICALS INC.
By: /s/ Richard L. Dunning
----------------------------------------
Richard L. Dunning
President and Chief Executive Officer
Attest:
By: /s/ Lowell S. Lifschultz
------------------------------------
Lowell S. Lifschultz
Secretary
10
<PAGE>
EXHIBIT 4.7
NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC.
SERIES 1
6.50% Convertible Subordinated Debenture
Due November 30, 2004
Principal Amount: $21,923,025.00
---------------------------------------------
This Debenture and the shares of Common Stock issuable upon its conversion have
not been registered under the Securities Act of 1933, as amended (the "Act"),
and may be transferred only in compliance with the provisions thereof.
---------------------------------------------
NEXELL THERAPEUTICS INC. f/k/a VIMRX PHARMACEUTICALS INC., a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), which term includes any successor corporation succeeding to the
Company, for value received, hereby promises to pay to Baxter Healthcare
Corporation ("Baxter") or registered assigns (the "Holder"), the principal
amount of $21,923,025.00 on November 30, 2004, in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public or private debts, by check mailed and addressed to the Holder
at the address shown on the register maintained by the Company for such purpose
and to pay interest on the unpaid principal amount hereof from the date hereof
at the rate of six and one-half (6.5%) percent per annum, compounded annually,
in like coin or currency by check likewise mailed and addressed to the Holder at
said address. Payments of accrued interest and one-third of the original
principal balance of this Debenture shall be made annually on the 30th day of
November in each year, commencing November 30, 2002, until the principal amount
thereof shall have been paid in full. The Company also promises to pay interest
on any overdue principal and (to the extent payment of such interest is
enforceable under applicable law) on any overdue installment of interest, at the
rate of ten (10%) percent per annum, compounded annually, until paid, payable
annually from and after November 30, 2002 as aforesaid.
1. The Debentures. This Debenture is one of two Debentures of the Company
of like tenor and maturity (except as to the conversion of such Debentures)
designated as its 6.50% Convertible Subordinated Debentures (the "Debentures"),
one labeled "Series 1" in the denomination $21,923,025.00, and the other labeled
"Series 2" in the denomination of $10,961,512.50, with both maturing on November
30, 2004, and with both bearing interest payable at the same rate and on the
same annual dates for the principal amount of such Debenture.
2. Exchange; Replacement of Debentures.
2.1. The Holder of this Debenture, or of a Debenture or Debentures
substituted therefor pursuant to the provisions of this Section 2, at the option
of such Holder may, in person or by duly authorized attorney, surrender the same
for exchange at the offices of the Company, and, within a reasonable time
thereafter, and without expense (except as provided below), receive in exchange
therefor a Debenture or Debentures dated as of the date to which interest has
been paid on the Debenture or Debentures so surrendered, or if such surrender is
prior to the date on which the first interest payment hereon is due, then dated
the date hereof, and payable to such person or persons as may be designated by
such Holder, for the same aggregate principal amount as the then unpaid
principal amount of the Debenture or Debentures so surrendered. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such exchange or transfer.
2.2. Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Debenture, and of indemnity
or security satisfactory to it (except that the Company shall not require the
posting or delivery
<PAGE>
of any indemnity bond or surety) , and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
this Debenture, if mutilated, the Company will make and deliver a new Debenture
of like tenor, in lieu of this Debenture, subject, however, to Section 7 hereof.
Any Debenture made and delivered in accordance with the provisions of this
Section 2.2 shall be dated as of the date to which interest has been paid on
this Debenture, or if made and delivered prior to the date on which the first
payment of interest hereon is due, then dated the date hereof.
3. Conversion of Debenture.
3.1. Conversion. The outstanding principal amount of this Debenture
may be converted in whole or in any part by the Holder on or after 5:00 p.m.,
New York Time, on November 30, 2002, and, if not sooner converted, automatically
shall be converted in its entirety (or any remainder thereof not yet converted)
at 5:00 p.m., New York Time, on November 30, 2004 (any such date of conversion,
the "Conversion Date"), into fully paid and non-assessable shares of the
Company's common stock, $.001 par value (the "Common Stock", and the shares of
Common Stock issuable upon conversion of this Debenture being hereinafter called
the "Shares") at the conversion price of ninety-five percent (95%) of the
average closing prices of the Common Stock on the thirty (30) trading days
preceding, but not including, the Conversion Date, as reported by the Nasdaq
National Market (or such other market which is on the Conversion Date the
principal market by trading volume for the Common Stock) (the "Conversion
Price"). All of such Shares shall be deliverable to the Holder upon presentation
and surrender of this Debenture to the Company at its principal office. In the
event the Holder converts this Debenture in accordance with this Section 3.1,
notwithstanding the failure of the Holder to so deliver this Debenture for
conversion, the conversion into Shares shall nevertheless be effective for all
purposes, and no further interest shall accrue on the converted portion of this
Debenture, nor shall any principal be payable hereon except as to any
unconverted portion, which shall be paid as set forth in the preamble to this
Debenture.
3.2. Delivery of Shares. As promptly as practicable after the date
upon which this Debenture is received by the Company following the Conversion
Date, the Company shall issue and deliver to the Holder a certificate for the
number of full Shares issuable upon such conversion.
3.3. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon conversion or partial conversion of this
Debenture. With respect to any fraction of a share which would otherwise be
issuable upon any such conversion, the Company shall issue one additional full
Share.
3.4. Accrued Interest on Conversion. The Company shall pay in cash
accrued interest on this Debenture that is converted through the date prior to
the Conversion Date.
3.5. Recapitalization, Merger and Sale of Assets. In the case of any
recapitalization, reclassification or change of the Company's outstanding shares
of Common Stock (other than a change in par value or from par value to no par
value, or as a result of a subdivision or combination), or in the case of any
consolidation or merger to which the Company is a party (other than a merger or
consolidation where the Company is the surviving corporation and which does not
result in any recapitalization, reclassification or change other than as
previously stated), or in the case of any sale, or conveyance of all, or
substantially all, of the property, assets, business and goodwill of the Company
as an entirety, provision shall be made, as part of the terms of any such
recapitalization, reclassification, consolidation, merger, sale or conveyance,
as to enable the Holder of this Debenture (in the principal amount hereof then
outstanding) to receive upon conversion, at the Conversion Price in effect at
the time of conversion and subject to the adjustments as herein provided, the
same kind, class and number of shares and other securities and property and/or
cash issued or paid as the Holder would have been entitled to receive had this
Debenture been converted immediately prior to the consummation of such
recapitalization, reclassification, consolidation, merger, sale or conveyance.
In this situation, the Conversion Price shall be deemed to be ninety-five
percent (95%) of the value of the consideration received by the holder of a
share of Common Stock upon such occurrence.
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<PAGE>
3.6. Reservation of Shares. The Company shall at all times reserve
and keep available for issuance and/or delivery upon conversion of this
Debenture, such number of shares of its Common Stock as shall be required for
issuance upon conversion of this Debenture after giving effect to any
adjustments required hereunder.
4. Redemption.
4.1. The Company may, at its option and then only if agreed to at the
sole discretion of the Holder, at any time redeem all but not less than all, of
the Debentures at a redemption price (the "Redemption Price") equal to 105% of
the principal amount thereof prior to the November 30, 1999 or 103% of the
principal amount thereof prior to November 30, 2001 or the principal amount
thereof after November 30, 2001, plus in each case interest accrued to the date
fixed for redemption (any such date of redemption, the "Redemption Date").
4.2. Not less than 30 days prior to the Redemption Date a notice (the
"Redemption Notice") specifying the Redemption Date shall be given by registered
or certified mail, return receipt requested, to the holders of record of the
Debentures (including the Holder) at their respective addresses as the same
shall appear on the books of the Company. Any Redemption Notice which was mailed
to the Holder in the manner herein provided shall be conclusively presumed to
have been duly given whether or not the Holder receives the notice.
4.3. Not more than three business days after receipt of the original
of this Debenture from the Holder, the Company shall send to the Holder by
registered or certified mail addressed to such holder at the address to which
the Redemption Notice was sent, a certified or cashier's check equal to the
Redemption Price of such holder's Debenture which shall thereafter not be
outstanding for any purpose.
5. Subordination.
5.1. The payment of the principal of and premium and interest on this
Debenture is expressly subordinated to the payment of all Senior Indebtedness,
as hereinafter defined, and, by acceptance of this Debenture, the Holder hereof
agrees, expressly for the benefit of the present and future holders of Senior
Indebtedness, to be bound by the provisions hereof and authorizes and directs
the Company on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided herein and appoints the Company his
attorney-in-fact for any and all such purposes. "Senior Indebtedness" means all
obligations of the Company to any person whose business includes the lending of
money to commercial enterprises, which such person is subject to the
jurisdiction of any federal or state regulatory agency that grants licenses for
the purposes of such person to conduct such business.
5.2. Upon any distribution of assets of the Company pursuant to any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any marshalling of the assets and liabilities of the
Company or otherwise, the holders of all Senior Indebtedness shall first be
entitled to receive payment in full of the principal thereof and premium, if
any, and the interest due thereon before the Holder of this Debenture becomes
entitled to receive any payment upon the principal of (and premium, if any) or
interest on indebtedness evidenced by this Debenture; and upon any such
dissolution, winding up, liquidation or reorganization, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than securities of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment, the payment of which is subordinated
to the payment of all Senior Indebtedness that may at any time be outstanding)
to which the Holder of this Debenture would be entitled except for the
provisions of this Section 5 shall be paid by the liquidating trustee or agent
or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, direct to the
holders of Senior Indebtedness or their representative or representatives,
ratably according to the aggregate amounts remaining unpaid on account of the
principal of and premium, if any, and interest on the Senior Indebtedness held
or represented by each, to the extent necessary to pay in full all Senior
Indebtedness.
3
<PAGE>
5.3. If any Senior Indebtedness shall be declared in default, as
defined in the instruments creating such Senior Indebtedness, and such default
shall be continuing, or such Senior Indebtedness shall become due and payable by
lapse of time, acceleration or otherwise, then all principal of and premium, if
any, and interest on all such matured Senior Indebtedness shall first be paid in
full, or such payment shall have been duly provided for, before any payment on
account of principal of or premium, if any, and interest is made by the Company
on this Debenture.
5.4. Nothing contained in this Debenture shall prevent the Company,
except at any time during the pendency of any dissolution, winding up,
liquidation or reorganization proceedings referred to in Section 5.2, or under
the conditions described in Section 5.3, from making payments at any scheduled
time, of interest on this Debenture.
5.5. No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any non-compliance by the Company with the terms, provisions
and covenants of this Debenture, regardless of any knowledge thereof any such
holder may have to be otherwise charged with.
6. Default.
6.1. Definition. The term "default" wherever used in this Debenture
shall mean one of the following events:
(a) The failure of the Company for a period of 15 days to pay
any installment of principal or interest on this Debenture when and as
the same shall become due and payable, notwithstanding the
subordination provisions hereof, except that failure to make any
payment of principal when prohibited by Section 5 shall not constitute
an event of default;
(b) The entry by a court of competent jurisdiction of a decree
or order (i) approving a petition seeking the reorganization of the
Company under the Federal bankruptcy laws or any other similar
applicable law or statute of the United States of America or any State
thereof, or (ii) appointing a trustee or receiver of the Company or of
all or any substantial part of its property upon the application of
any creditor in any insolvency or bankruptcy proceeding or other
creditor's suit, and such decree or order shall have continued
undischarged for an aggregate period of 90 days; or
(c) The adjudication of the Company as a bankrupt by a court of
competent jurisdiction; or the filing by the Company of a petition in
voluntary bankruptcy or the making by it of an assignment for the
benefit of creditors or the consenting by it to the appointment of a
receiver or receivers of all or any substantial part of the property
of the Company; or the filing by the Company of a petition or answer
seeking reorganization under the Federal bankruptcy laws or any other
similar applicable law or statute of the United States of America or
any State thereof; or the filing by the Company of a petition to take
advantage of any debtor's act.
6.2. Rights of Holder to Accelerate. If any one or more of the
foregoing defaults shall happen, then during the continuance of any such
default, the Holder hereof, by notice in writing to the Company, may declare the
principal of this Debenture to be due and payable, and upon any such declaration
the same shall become and be immediately due and payable. However, the right to
actual payment shall continue to be subject to the subordination provisions of
Section 5 and any prior rights of the holders of any Senior Indebtedness.
7. Compliance with the Securities Act of 1933.
4
<PAGE>
7.1. Disposition of Debenture and/or Shares. Subject to the Holder's
rights, if any, under the Registration Rights Agreement, dated as of December
17, 1997, between the Company and Baxter, as amended (the "Registration Rights
Agreement"), this Debenture and/or the Shares issued upon conversion hereof may
not be sold or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom this Debenture or the
Shares may legally be transferred without registration and without the
delivery of a current prospectus under the Act with respect thereto
and then only against receipt of an agreement of such person to comply
with the provisions of this Section 7 with respect to any resale or
other disposition of such securities unless, in the opinion of
counsel, such agreement is not required; or
(b) To any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering
thereof for such sale or disposition.
7.2. Legending of Certificates. Subject to the Holder's rights, if
any, under the Registration Rights Agreement, each certificate for the Shares or
for any other security issued or issuable upon conversion of this Debenture
shall contain a legend on the face thereof, in form and substance satisfactory
to counsel to the Company, setting forth the restrictions on transfer thereof
contained in this Section 7.
8. Registered Owner. The Company may deem and treat the person in whose
name this Debenture is registered as the absolute owner hereof (whether or not
this Debenture or interest hereon shall be overdue) for the purpose of receiving
payment of or on account of the principal hereof and interest due hereon, and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
9. Section and Other Headings. Section and other headings in this
Debenture are for convenience of reference only and shall not affect the meaning
or interpretation of this Debenture.
10. Applicable Law. This Debenture shall be construed and enforced in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has duly caused this Debenture to be
signed in its name by its Chief Executive Officer by his manual signature or a
facsimile thereof, and the corporate seal to be imprinted hereon.
Dated: May 28, 1999 NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
/s/ Richard L. Dunning
By: ________________________________
Richard L. Dunning
Chief Executive Officer
/s/ Lowell S. Lifschultz
______________________________
Lowell S. Lifschultz
Secretary
5
<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED,____________________________________ hereby sells,
assigns and transfers the within Debenture, subject to the provisions of
Section 7 thereof, unto________________________________________________________
(Please typewrite or print in block letters) with an
address of ____________________________________and does hereby irrevocably
constitute and appoint ___________________________ attorney to transfer the
same on the books of the Company with full power of substitution in the
premises.
Signature __________________________________
Dated: ________________________________
6
<PAGE>
CONVERSION FORM
Dated: _____________________
The undersigned hereby surrenders the within Debenture for conversion
into Common Stock, $.001 par value ("Common Stock"), of Nexell Therapeutics Inc.
f/k/a VIMRx Pharmaceuticals Inc. (the "Company") to the extent of the full
principal amount thereof.
The undersigned hereby acknowledges that, unless registered pursuant
to a certain Registration Rights Agreement, dated as of December 17, 1997,
between the Company and Baxter Healthcare Corporation, as amended (the
"Registration Rights Agreement"), the shares of Common Stock issuable upon such
conversion will not be registered under the Securities Act of 1933, as amended
(the "Act"), and (ii) may not be resold except in accordance with the
requirements of such Act, including Rule 144 thereunder, if applicable. Unless
registered pursuant to the Registration Rights Agreement, the undersigned
further consents to the placing of a legend on the certificates for the shares
of Common Stock to be issued upon such conversion to the foregoing effect.
Name ___________________________________________________________________________
(Please typewrite or print in block letters.)
Address_________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Signature ______________________________________________________
7
<PAGE>
EXHIBIT 4.8
NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC.
SERIES 2
6.50% Convertible Subordinated Debenture
Due November 30, 2004
Principal Amount: $10,961,512.50
---------------------------------------------
This Debenture and the shares of Common Stock issuable
upon its conversion have not been registered under the
Securities Act of 1933, as amended (the "Act"), and may
be transferred only in compliance with the provisions thereof.
---------------------------------------------
NEXELL THERAPEUTICS INC. f/k/a VIMRX PHARMACEUTICALS INC., a
corporation duly organized and existing under the laws of the State of Delaware
(the "Company"), which term includes any successor corporation succeeding to the
Company, for value received, hereby promises to pay to Baxter Healthcare
Corporation ("Baxter") or registered assigns (the "Holder"), the principal
amount of $10,961,512.50 on November 30, 2004, in such coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public or private debts, by check mailed and addressed to the Holder
at the address shown on the register maintained by the Company for such purpose
and to pay interest on the unpaid principal amount hereof from the date hereof
at the rate of six and one-half (6.5%) percent per annum, compounded annually,
in like coin or currency by check likewise mailed and addressed to the Holder at
said address. Payments of accrued interest and one- third of the original
principal balance of this Debenture shall be made annually on the 30th day of
November in each year, commencing November 30, 2002, until the principal amount
thereof shall have been paid in full. The Company also promises to pay interest
on any overdue principal and (to the extent payment of such interest is
enforceable under applicable law) on any overdue installment of interest, at the
rate of ten (10%) percent per annum, compounded annually, until paid, payable
annually from and after November 30, 2002 as aforesaid.
1. The Debentures.
This Debenture is one of two Debentures of the Company of like tenor
and maturity (except as to the conversion of such Debentures) designated as its
6.50% Convertible Subordinated Debentures (the "Debentures"), one labeled
"Series 1" in the denomination of $21,923,025.00, and the other labeled "Series
2" in the denomination of $10,961,512.50, with both maturing on November 30,
2004, and with both bearing interest payable at the same rate and on the same
annual dates for the principal amount of such Debenture.
2. Exchange; Replacement of Debentures.
2.1. The Holder of this Debenture, or of a Debenture or Debentures
substituted therefor pursuant to the provisions of this Section 2, at the option
of such Holder may, in person or by duly authorized attorney, surrender the same
for exchange at the offices of the Company, and, within a reasonable time
thereafter, and without expense (except as provided below), receive in exchange
therefor a Debenture or Debentures dated as of the date to which interest has
been paid on the Debenture or Debentures so surrendered, or if such surrender is
prior to the date on which the first interest payment hereon is due, then dated
the date hereof, and payable to such person or persons as may be designated by
such Holder, for the same aggregate principal amount as the then unpaid
principal amount of the Debenture or Debentures so surrendered. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such exchange or transfer.
<PAGE>
2.2. Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Debenture, and of indemnity
or security satisfactory to it (except that the Company shall not require the
posting or delivery of any indemnity bond or surety) , and upon reimbursement to
the Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of this Debenture, if mutilated, the Company will make and
deliver a new Debenture of like tenor, in lieu of this Debenture, subject,
however, to Section 7 hereof. Any Debenture made and delivered in accordance
with the provisions of this Section 2.2 shall be dated as of the date to which
interest has been paid on this Debenture, or if made and delivered prior to the
date on which the first payment of interest hereon is due, then dated the date
hereof.
3. Conversion of Debenture.
3.1. Conversion. With the prior written consent of the Company,
which may be granted or withheld in its sole discretion, the Holder may elect,
on or after 5:00 p.m., New York Time, on November 30, 2002 (any such date of
conversion, the "Conversion Date"), to convert all or any part of the
outstanding principal amount of this Debenture into fully paid and non-
assessable shares of the Company's common stock, $.001 par value (the "Common
Stock", and the shares of Common Stock issuable upon conversion of this
Debenture being hereinafter called the "Shares") at the conversion price of
ninety-five percent (95%) of the average closing prices of the Common Stock on
the thirty (30) trading days preceding, but not including, the Conversion Date,
as reported by the Nasdaq National Market (or such other market which is on the
Conversion Date the principal market by trading volume for the Common Stock)
(the "Conversion Price"). All of such Shares shall be deliverable to the Holder
upon presentation and surrender of this Debenture to the Company at its
principal office. In the event the Holder converts this Debenture in accordance
with this Section 3.1, notwithstanding the failure of the Holder to so deliver
this Debenture for conversion, the conversion into Shares shall nevertheless be
effective for all purposes, and no further interest shall accrue on the
converted portion of this Debenture, nor shall any principal be payable hereon
except as to any unconverted portion, which shall be paid as set forth in the
preamble to this Debenture.
3.2. Delivery of Shares. As promptly as practicable after the date
upon which this Debenture is received by the Company following the Conversion
Date, the Company shall issue and deliver to the Holder a certificate for the
number of full Shares issuable upon such conversion.
3.3. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon conversion or partial conversion of this
Debenture. With respect to any fraction of a share which would otherwise be
issuable upon any such conversion, the Company shall issue one additional full
Share.
3.4. Accrued Interest on Conversion. The Company shall pay in cash
accrued interest on this Debenture that is converted through the date prior to
the Conversion Date.
3.5. Recapitalization, Merger and Sale of Assets. In the case of any
recapitalization, reclassification or change of the Company's outstanding shares
of Common Stock (other than a change in par value or from par value to no par
value, or as a result of a subdivision or combination), or in the case of any
consolidation or merger to which the Company is a party (other than a merger or
consolidation where the Company is the surviving corporation and which does not
result in any recapitalization, reclassification or change other than as
previously stated), or in the case of any sale, or conveyance of all, or
substantially all, of the property, assets, business and goodwill of the Company
as an entirety, provision shall be made, as part of the terms of any such
recapitalization, reclassification, consolidation, merger, sale or conveyance,
as to enable the Holder of this Debenture (in the principal amount hereof then
outstanding) to receive upon conversion, at the Conversion Price in effect at
the time of conversion and subject to the adjustments as herein provided, the
same kind, class and number of shares and other securities and property and/or
cash issued or paid as the Holder would have been entitled to receive had this
Debenture been converted immediately prior to the consummation of such
recapitalization, reclassification, consolidation, merger, sale or conveyance.
In this situation, the Conversion Price shall be deemed to be ninety-five
percent (95%) of the
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<PAGE>
value of the consideration received by the holder of a share of Common Stock
upon such occurrence.
3.6. Reservation of Shares. The Company shall at all times reserve
and keep available for issuance and/or delivery upon conversion of this
Debenture, such number of shares of its Common Stock as shall be required for
issuance upon conversion of this Debenture after giving effect to any
adjustments required hereunder.
4. Redemption.
4.1. The Company may, at its option and then only if agreed to at the
sole discretion of the Holder, at any time redeem all but not less than all, of
the Debentures at a redemption price (the "Redemption Price") equal to 105% of
the principal amount thereof prior to the November 30, 1999 or 103% of the
principal amount thereof prior to November 30, 2001 or the principal amount
thereof after November 30, 2001, plus in each case interest accrued to the date
fixed for redemption (any such date of redemption, the "Redemption Date").
4.2. Not less than 30 days prior to the Redemption Date a notice (the
"Redemption Notice") specifying the Redemption Date shall be given by registered
or certified mail, return receipt requested, to the holders of record of the
Debentures (including the Holder) at their respective addresses as the same
shall appear on the books of the Company. Any Redemption Notice which was mailed
to the Holder in the manner herein provided shall be conclusively presumed to
have been duly given whether or not the Holder receives the notice.
4.3. Not more than three business days after receipt of the original
of this Debenture from the Holder, the Company shall send to the Holder by
registered or certified mail addressed to such holder at the address to which
the Redemption Notice was sent, a certified or cashier's check equal to the
Redemption Price of such holder's Debenture which shall thereafter not be
outstanding for any purpose.
5. Subordination.
5.1. The payment of the principal of and premium and interest on this
Debenture is expressly subordinated to the payment of all Senior Indebtedness,
as hereinafter defined, and, by acceptance of this Debenture, the Holder hereof
agrees, expressly for the benefit of the present and future holders of Senior
Indebtedness, to be bound by the provisions hereof and authorizes and directs
the Company on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided herein and appoints the Company his
attorney-in-fact for any and all such purposes. "Senior Indebtedness" means all
obligations of the Company to any person whose business includes the lending of
money to commercial enterprises, which such person is subject to the
jurisdiction of any federal or state regulatory agency that grants licenses for
the purposes of such person to conduct such business.
5.2. Upon any distribution of assets of the Company pursuant to any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any marshalling of the assets and liabilities of the
Company or otherwise, the holders of all Senior Indebtedness shall first be
entitled to receive payment in full of the principal thereof and premium, if
any, and the interest due thereon before the Holder of this Debenture becomes
entitled to receive any payment upon the principal of (and premium, if any) or
interest on indebtedness evidenced by this Debenture; and upon any such
dissolution, winding up, liquidation or reorganization, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than securities of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment, the payment of which is subordinated
to the payment of all Senior Indebtedness that may at any time be outstanding)
to which the Holder of this Debenture would be entitled except for the
provisions of this Section 5 shall be paid by the liquidating trustee or agent
or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, direct to the
holders of Senior Indebtedness or their representative or representatives,
ratably according to the
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<PAGE>
aggregate amounts remaining unpaid on account of the principal of and premium,
if any, and interest on the Senior Indebtedness held or represented by each, to
the extent necessary to pay in full all Senior Indebtedness.
5.3. If any Senior Indebtedness shall be declared in default, as
defined in the instruments creating such Senior Indebtedness, and such default
shall be continuing, or such Senior Indebtedness shall become due and payable by
lapse of time, acceleration or otherwise, then all principal of and premium, if
any, and interest on all such matured Senior Indebtedness shall first be paid in
full, or such payment shall have been duly provided for, before any payment on
account of principal of or premium, if any, and interest is made by the Company
on this Debenture.
5.4. Nothing contained in this Debenture shall prevent the Company,
except at any time during the pendency of any dissolution, winding up,
liquidation or reorganization proceedings referred to in Section 5.2, or under
the conditions described in Section 5.3, from making payments at any scheduled
time, of interest on this Debenture.
5.5. No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any non-compliance by the Company with the terms, provisions
and covenants of this Debenture, regardless of any knowledge thereof any such
holder may have to be otherwise charged with.
6. Default.
6.1. Definition. The term "default" wherever used in this Debenture
shall mean one of the following events:
(a) The failure of the Company for a period of 15 days to pay
any installment of principal or interest on this Debenture when and as
the same shall become due and payable, notwithstanding the
subordination provisions hereof, except that failure to make any
payment of principal when prohibited by Section 5 shall not constitute
an event of default;
(b) The entry by a court of competent jurisdiction of a decree
or order (i) approving a petition seeking the reorganization of the
Company under the Federal bankruptcy laws or any other similar
applicable law or statute of the United States of America or any State
thereof, or (ii) appointing a trustee or receiver of the Company or of
all or any substantial part of its property upon the application of
any creditor in any insolvency or bankruptcy proceeding or other
creditor's suit, and such decree or order shall have continued
undischarged for an aggregate period of 90 days; or
(c) The adjudication of the Company as a bankrupt by a court of
competent jurisdiction; or the filing by the Company of a petition in
voluntary bankruptcy or the making by it of an assignment for the
benefit of creditors or the consenting by it to the appointment of a
receiver or receivers of all or any substantial part of the property
of the Company; or the filing by the Company of a petition or answer
seeking reorganization under the Federal bankruptcy laws or any other
similar applicable law or statute of the United States of America or
any State thereof; or the filing by the Company of a petition to take
advantage of any debtor's act.
6.2. Rights of Holder to Accelerate. If any one or more of the
foregoing defaults shall happen, then during the continuance of any such
default, the Holder hereof, by notice in writing to the Company, may declare the
principal of this Debenture to be due and payable, and upon any such declaration
the same shall become and be immediately due and payable. However, the right to
actual payment shall continue to be subject to the subordination provisions of
Section 5 and any prior rights of the holders of any Senior Indebtedness.
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<PAGE>
7. Compliance with the Securities Act of 1933.
7.1. Disposition of Debenture and/or Shares. Subject to the Holder's
rights, if any, under the Registration Rights Agreement, dated as of December
17, 1997, between the Company and Baxter, as amended (the "Registration Rights
Agreement"), this Debenture and/or the Shares issued upon conversion hereof may
not be sold or otherwise disposed of except as follows:
(a) To a person who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom this Debenture or the
Shares may legally be transferred without registration and without the
delivery of a current prospectus under the Act with respect thereto
and then only against receipt of an agreement of such person to comply
with the provisions of this Section 7 with respect to any resale or
other disposition of such securities unless, in the opinion of
counsel, such agreement is not required; or
(b) To any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering
thereof for such sale or disposition.
7.2. Legending of Certificates. Subject to the Holder's rights, if
any, under the Registration Rights Agreement, each certificate for the Shares or
for any other security issued or issuable upon conversion of this Debenture
shall contain a legend on the face thereof, in form and substance satisfactory
to counsel to the Company, setting forth the restrictions on transfer thereof
contained in this Section 7.
8. Registered Owner.
The Company may deem and treat the person in whose name this Debenture
is registered as the absolute owner hereof (whether or not this Debenture or
interest hereon shall be overdue) for the purpose of receiving payment of or on
account of the principal hereof and interest due hereon, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
9. Section and Other Headings.
Section and other headings in this Debenture are for convenience of
reference only and shall not affect the meaning or interpretation of this
Debenture.
10. Applicable Law.
This Debenture shall be construed and enforced in accordance with the
laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has duly caused this Debenture to be
signed in its name by its Chief Executive Officer by his manual signature or a
facsimile thereof, and the corporate seal to be imprinted hereon.
Dated: May 28, 1999 NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
/s/ Richard L. Dunning
By:_______________________________
Richard L. Dunning
Chief Executive Officer
/s/ Lowell S. Lifschultz
_________________________
Lowell S. Lifschultz
Secretary
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<PAGE>
ASSIGNMENT FORM
FOR VALUE RECEIVED, __________ hereby sells, assigns and transfers the
within Debenture, subject to the provisions of Section 7 thereof, unto
_____________________________________________________ (Please typewrite or print
in block letters) with an address of and does hereby irrevocably constitute and
appoint ________________ attorney to transfer the same on the books of the
Company with full power of substitution in the premises.
Signature_______________________________
Dated:_________________________
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<PAGE>
CONVERSION FORM
Dated: _____________________
The undersigned hereby surrenders the within Debenture for conversion
into Common Stock, $.001 par value ("Common Stock"), of Nexell Therapeutics Inc.
f/k/a VIMRx Pharmaceuticals Inc. (the "Company") to the extent of the full
principal amount thereof.
The undersigned hereby acknowledges that, unless registered pursuant
to a certain Registration Rights Agreement, dated as of December 17, 1997,
between the Company and Baxter Healthcare Corporation, as amended (the
"Registration Rights Agreement"), the shares of Common Stock issuable upon such
conversion will not be registered under the Securities Act of 1933, as amended
(the "Act"), and (ii) may not be resold except in accordance with the
requirements of such Act, including Rule 144 thereunder, if applicable. Unless
registered pursuant to the Registration Rights Agreement, the undersigned
further consents to the placing of a legend on the certificates for the shares
of Common Stock to be issued upon such conversion to the foregoing effect.
Name ___________________________________________________________________________
(Please typewrite or print in block letters.)
Address ________________________________________________________________________
________________________________________________________________________________
Signature_____________________________
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<PAGE>
EXHIBIT 10.39
Void after 5:00 p.m.
New York Time
May 27, 2006
NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC.
Common Stock Purchase Warrant
-------------------
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT (A)
TO A PERSON WHO, IN THE OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY, IS A PERSON TO WHOM THE
SECURITIES MAY BE LEGALLY TRANSFERRED WITHOUT REGISTRATION
AND WITHOUT DELIVERY OF A CURRENT PROSPECTUS UNDER THE
ACT, OR (B) TO A PERSON UPON DELIVERY OF A PROSPECTUS OR
OFFERING CIRCULAR THEN MEETING THE REQUIREMENTS OF THE
ACT RELATING TO SUCH SECURITIES AND THE OFFERING THEREOF
FOR SUCH SALE OR DISPOSITION.
-------------------
This certifies that, FOR VALUE RECEIVED, BAXTER HEALTHCARE CORPORATION
("Baxter"), or registered assigns (the "Holder") , is entitled to purchase,
subject to the provisions of this Warrant, from NEXELL THERAPEUTICS INC. f/k/a
VIMRX PHARMACEUTICALS INC., a Delaware corporation (the "Company"), 5,200,000
fully paid and nonassessable shares of the Company's common stock, $.001 par
value (the "Common Stock"), at a per share price of $1.15, from time to time or
at any time during the period commencing on the date hereof until 5:00 p.m., New
York Time, on May 27, 2006, at which time this Warrant shall expire and become
void. The number of shares of Common Stock to be received upon exercise of this
Warrant and the price to be paid for each such share of Common Stock are subject
to possible adjustment from time to time as hereinafter set forth. The shares of
Common Stock or other securities or property deliverable upon such exercise as
adjusted from time to time are hereinafter sometimes referred to as the "Warrant
Shares" and the exercise price of a share of Common Stock in effect at any time
and as adjusted from time to time is hereinafter sometimes referred to as the
"Exercise Price." Unless the context otherwise requires, the term "Warrant" as
used herein includes this Warrant and any other Warrant or Warrants which may be
issued pursuant to the provisions of this Warrant, whether upon transfer,
assignment, partial exercise, divisions, combinations, exchange or otherwise,
and the term "Holder" includes any permitted transferee or transferees or
permitted assignee or assignees of the Holder named above, all of whom shall be
subject to the provisions of this Warrant, and, when used with reference to
Warrant Shares, means the holder or holders of such Warrant Shares.
Section 1. Exercise of Warrant.
1.1 Method of Exercise. This Warrant may be exercised in whole or in
part, from time to time or at any time by the Holder during the period
commencing on the date hereof until 5:00 p.m., New York Time, on May 27, 2006
(the date by which this Warrant must be exercised hereinafter referred to as the
"Termination Date"), by presentation and surrender hereof to the Company at its
principal office with the Form of Subscription annexed hereto, duly executed and
accompanied by payment, by certified or official bank check payable to the order
of the Company, of the Exercise Price for the total number of Warrant Shares
purchased.
1.2 Delivery of Shares. Upon proper exercise of this Warrant, the
Company promptly shall deliver certificates for the Warrant Shares to the
Holder.
<PAGE>
1.3 Partial Exercise. If this Warrant is exercised in part only, the
Company shall, upon presentation of this Warrant upon such exercise, execute and
deliver (with the certificate for the Warrant Shares purchased) a new Warrant
evidencing the rights of the Holder hereof to purchase the balance of the
Warrant Shares purchasable hereunder upon the same terms and conditions as
herein set forth.
1.4 Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon exercise of this Warrant but, in lieu
thereof, the Company shall round up to the next full share.
Section 2. Exercise Price and Adjustments.
2.1 Initial Exercise Price and Capital Adjustments. The Exercise
Price at which the Warrant Shares shall be purchasable shall be $1.15, subject
to adjustment from time to time in the event of cash dividends, stock dividends,
stock subdivisions, stock splits, stock combinations or reverse stock splits, as
follows: In the event the Company shall at any time after the date hereof (a)
pay a cash dividend to the holders of shares of its Common Stock, (b) issue
shares of its Common Stock as a stock dividend or (c) subdivide or split or
combine or reverse stock split the outstanding shares of its Common Stock, the
Exercise Price shall forthwith proportionately be decreased in the case of a
cash dividend, stock dividend, stock subdivision or stock split, or
proportionately be increased in the case of a combination or reverse stock
split, to the nearest one cent to give effect to such change. Concurrently, the
number of Warrant Shares issuable upon exercise of this Warrant shall be
increased or decreased in proportion to the increase or decrease in the number
of shares of Common Stock outstanding resulting from such change. Any such
adjustment shall become effective at the close of business on the date that the
subdivision or combination shall become effective, in the event of a subdivision
or combination, or at the close of business on the record date fixed for the
determination of stockholders entitled to receipt of the cash dividend or stock
dividend, in the event of a cash dividend or stock dividend.
2.2 Reorganizations, Mergers and Sale of Assets. In the event of any
reorganization or reclassification of the outstanding shares of Common Stock
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination) or in
the case of any consolidation of the Company with, or merger of the Company
into, another corporation after which no securities of the Company will be
publicly held, or in the case of any sale, lease or conveyance of all, or
substantially all, of the property, assets, business and goodwill of the Company
as an entity, the Company will cause provision to be made so that the Holder
shall thereafter have the right upon exercise to purchase the kind and amount of
shares of stock and other securities and property receivable upon such
reorganization, reclassification, consolidation, merger or sale by a holder of
the number of shares of Common Stock which the Holder would have received had he
exercised this Warrant immediately prior to such reorganization,
reclassification, consolidation, merger or sale, at a price equal to the
aggregate Exercise Price then in effect pertaining to this Warrant (the kind,
amount and price of such stock and other securities to be subject to adjustment
as herein provided). In the event that the Company enters into a letter of
intent or agreement providing for any of the foregoing (the "Merger Agreement"),
the Company may, at its option, upon written notice to the Holder at least
twenty (20) days prior to the Closing Date under the Merger Agreement, mandate
that the Holder exercise this Warrant for the balance of the Warrant Shares then
exercisable effective immediately prior to the Closing of such Merger Agreement.
In the event that, prior to such Closing Date, the Holder does not exercise this
Warrant in full, this Warrant shall expire effective as of such Closing Date as
to any unexercised portion. Upon a mandated exercise, the Holder shall receive
that amount of consideration with respect to the Warrant Shares, and at such
time, as and when a holder of the same number of shares of Common Stock
immediately prior to such Closing Date receives consideration on account of such
holder's shares pursuant to the Merger Agreement. The foregoing provisions shall
similarly apply to successive reorganizations, reclassifications,
consolidations, mergers, sales, leases or conveyances.
2.3 Liquidation and Dissolution. In the event the Company shall, at
any time prior to the expiration of this Warrant and prior to the exercise
thereof, dissolve, liquidate or wind up its affairs, the Holder shall be
entitled, upon the
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<PAGE>
exercise thereof, to receive, in lieu of the shares which he would have been
entitled to receive, the same kind and amount of assets as would have been
issued, distributed or paid to him upon any such dissolution, liquidation or
winding up with respect to such shares had he been the holder of record of such
shares on the record date for the determination of those entitled to receive any
such liquidating distribution. After any such dissolution, liquidation or
winding up which shall result in any cash distribution in excess of the Exercise
Price provided for by this Warrant, the Holder may, at his option, exercise the
same without making payment of the Exercise Price and in such case the company
shall upon the distribution to the Holder consider that the Exercise Price has
been paid in full to it and, in making settlement to the Holder, shall deduct
from the amount payable to the Holder an amount equal to such Exercise Price.
2.4 Amendments Not Required to Reflect Adjustments. Irrespective of
any adjustments in the Exercise Price or the number or kind of shares
purchasable upon exercise of this Warrant, this Warrant may continue to express
the same price and number and kind of shares as originally issued and need not
be amended to reflect each such adjustment.
2.5 Conclusiveness of Computation by Accountants. In the event the
Company shall retain a firm of independent public accountants of recognized
standing (who may be any such firm regularly employed by the Company) to make
any computation required under this Section 2, a certificate signed by any such
firm shall be conclusive evidence of the correctness of any computation made
under this Section 2.
Section 3. Exchange, Assignment or Loss of Warrant.
3.1 Exchange of Warrant. This Warrant is exchangeable, without
expense, at the option of the Holder, upon presentation and surrender hereof to
the Company for other Warrants of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of Warrant Shares
purchasable hereunder on the same terms and conditions as herein set forth.
3.2 Assignment or Other Transfer of Warrant. The Holder may
transfer, sell, assign, pledge, hypothecate, create a security in or lien on,
place in trust (voting or otherwise), assign or in any other way encumber or
dispose of, directly or indirectly and whether or not by operation of law or for
value, this Warrant or the Warrant Shares, only upon compliance with Section 4
hereof. In the event of a permitted assignment, this Warrant must be presented
and surrendered to the Company at its principal office or at the office of its
stock transfer agent, if any, with the Form of Assignment annexed hereto duly
executed, and accompanied by funds sufficient to pay any transfer tax. Promptly
thereafter the Company shall, without charge, execute and deliver a new Warrant
in the name of the assignee named in such Form of Assignment and this Warrant
shall promptly be canceled.
3.3 Loss or Mutilation of Warrant. Upon receipt by the Company of
evidence satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and (in case of loss, theft or destruction) of reasonably
satisfactory indemnification (except that the holder shall not be required to
post an indemnity bond), and upon surrender and cancellation of this Warrant, if
mutilated, the Company will execute and deliver a new Warrant of like tenor and
date and any such lost, stolen or destroyed Warrant shall thereupon become void.
Any such new Warrant executed and delivered shall constitute an additional
contractual obligation on the part of the Company, whether or not this Warrant
so lost, stolen, destroyed or mutilated shall be at any time enforceable by
anyone.
Section 4. Compliance with Act.
4.1 Disposition of Warrant and/or Warrant Shares. This Warrant
and/or the Warrant Shares may not be sold or otherwise disposed of except as
follows:
(a) To a person who, in the opinion of counsel reasonably
satisfactory to the Company, is a person to whom this Warrant or the
Warrant Shares may legally be transferred without registration and
without the delivery of a current prospectus under the Act with
respect
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<PAGE>
thereto and then only against receipt of an agreement of such person
to comply with the provisions of this Section 4 with respect to any
resale or other disposition of such securities unless, in the opinion
of counsel, such agreement is not required; or
(b) To any person upon delivery of a prospectus or offering
circular then meeting the requirements of the Act relating to such
securities and the offering thereof for such sale or disposition.
4.2 Legend on Certificates. Each certificate for Warrant Shares or
for any other security issued or issuable upon exercise of this Warrant shall
contain a legend on the face thereof, in form and substance satisfactory to
counsel to the Company, setting forth the restrictions on transfer thereof
contained in this Section 4.
Section 5. Registration Rights.
The Holder's registration rights with respect to the Warrant Shares
shall be governed by, and shall be in accordance with, the terms and conditions
of the Registration Rights Agreement, dated as of December 17, 1997, as amended,
between the Company and Baxter.
Section 6. Company Covenants.
6.1 Reservation and Issuance of Warrant Shares. The Company hereby
undertakes until expiration of this Warrant to reserve for issuance and/or
delivery upon exercise of this Warrant, such number of shares of its Common
Stock as shall be required for issuance and/or delivery upon exercise hereon in
full and agrees that all Warrant Shares so issued and/or delivered will be
validly issued, fully paid and nonassessable, and further agrees to pay all
taxes and charges that may be imposed upon such issuance and/or delivery.
6.2 Officer's Certificate. In the event the Exercise Price shall be
adjusted as required by Section 2 hereof, the Company shall promptly mail to the
Holder an officer's certificate setting forth the adjustments so required and
including, in reasonable detail, the method of calculating the adjustments and
the transaction requiring the adjustment.
Section 7. Miscellaneous.
7.1 Status of Holder. The Holder shall not be entitled to vote or
receive dividends and shall not otherwise be deemed a shareholder of the
Company.
7.2 Notices. All notices required hereunder shall be sent by first-
class mail, postage prepaid, and shall be addressed, if to the Holder, to the
last known address furnished to the Company and if to the Company, to: NEXELL
THERAPEUTICS INC., 9 Parker, Irvine, California 92618, Attention: Chief
Executive Officer, unless another address is designated in writing by the Holder
or the Company.
7.3 Binding Effect. All of the covenants and provisions of this
Warrant by or for the benefit of the Company or the Holder shall bind and inure
to the benefit of the Company and the Holder and their respective successors and
permitted assigns.
7.4 Governing Law. This Warrant shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be construed
in accordance with the internal laws of said state without regard to conflicts
of laws principles.
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IN WITNESS WHEREOF, this Warrant has been duly executed by the Company
under its corporate seal as of the 28th day of May, 1999.
NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
/s/ Richard L. Dunning
By:___________________________
Richard L. Dunning
Chief Executive Officer
/s/ Lowell S. Lifschultz
__________________________
Lowell S. Lifschultz
Secretary
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FORM OF ASSIGNMENT
(To be signed only upon such permitted assignment)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________ the right represented by the within Warrant
to purchase, from NEXELL THERAPEUTICS INC. f/k/a VIMRx PHARMACEUTICALS INC. (the
"Company"), shares of the Common Stock of the Company, to which the within
Warrant relates, and appoints ______________________ attorney to transfer said
right, with full power of substitution in the premises.
Dated:
________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant.)
In the presence of:
__________________________________
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<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: NEXELL THERAPEUTICS INC. f/k/a
VIMRx PHARMACEUTICALS INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase rights represented by said Warrant for, and to
purchase thereunder, _________shares of Common Stock of the Company, and
herewith makes payment of $_______ therefor and requests that such certificates)
be issued in the name of and be delivered to ________________________ whose
address is ____________________ and if such shares shall not be all of the
shares purchased hereunder, that a new Warrant of like tenor for the balance of
shares purchasable hereunder be delivered to the undersigned.
Dated:
________________________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant.)
In the presence of:
________________________________
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