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Exhibit 2.2
Preferred Stock and Warrant Agreement dated as of December 6,
1996, among the Registrant, Zynaxis, Inc., Vaxcel, Inc. and each of the holders
of Zynaxis, Inc. warrants signatory thereto.
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PREFERRED STOCK AND WARRANT AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of
December 6, 1996, by and among ZYNAXIS, INC., a Pennsylvania corporation
("Zynaxis"), CYTRX CORPORATION, a Delaware corporation ("CytRx"), Vaxcel, Inc.,
a Delaware corporation and a wholly owned subsidiary of CytRx ("Vaxcel") and the
persons listed in Exhibit A (the "Securityholders").
WITNESSETH:
WHEREAS, the Securityholders collectively hold all of the outstanding
shares of Series A Convertible Preferred Stock of Zynaxis (the "Series A Stock")
and each Securityholder holds the number of shares of Series A Stock and the
number of warrants to purchase additional shares of Common Stock of Zynaxis set
forth beside such Securityholder's name in Exhibit A (the "Warrants");
WHEREAS, the Series A Stock and the Warrants were issued pursuant to
that certain Preferred Stock and Warrant Purchase Agreement dated March 29,
1995, as amended (the "Preferred Stock and Warrant Purchase Agreement"), and in
connection with bridge loans extended by certain of the Securityholders to
Zynaxis;
WHEREAS, simultaneously with the execution of this Agreement Zynaxis is
entering into an Agreement and Plan of Merger and Contribution (the "Merger and
Contribution Agreement") with CytRx, Vaxcel, and Vaxcel Merger Sub, Inc., a
Georgia corporation and a newly formed, wholly owned subsidiary of Vaxcel
("Vaxcel Merger Sub"), and certain other agreements, including, among other
things, a Liquidation Agreement (the "Liquidation Agreement") contemplating the
sale of Assets (as defined therein) of Zynaxis and documents (the "Secured Loan
Documents") relating to a secured loan being extended to Zynaxis by CytRx (the
"Secured Loan"). The Merger and Contribution Agreement provides for the issuance
of shares of Vaxcel Common Stock and a warrant to purchase shares of Vaxcel
Common Stock to CytRx in exchange for CytRx's contribution to Vaxcel of the
Secured Loan and a cash payment in an amount equal to Four Million Dollars
($4,000,000) minus the aggregate principal and interest balance outstanding
under the Secured Loan, subject to adjustment for payments made to shareholders
of Zynaxis pursuant to Section 3.3 of the Merger and Contribution Agreement. The
Merger and Contribution Agreement also provides for the issuance of shares of
Vaxcel Common Stock to the existing shareholders of Zynaxis in exchange for the
contribution to Vaxcel by the existing shareholders of Zynaxis of all of the
outstanding shares of capital stock of Zynaxis by means of a merger of Vaxcel
Merger Sub with and into Zynaxis. At the effective time of such merger, the
outstanding shares of the capital stock of Zynaxis will be converted into the
right to receive shares of the common stock of Vaxcel (except as provided
herein). As a result, shareholders of Zynaxis will become shareholders of Vaxcel
and Zynaxis will continue to conduct its business and operations as a wholly
owned subsidiary of Vaxcel.
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WHEREAS, CytRx is unwilling to enter into the Merger and Contribution
Agreement unless the rights of the Securityholders are modified as set forth in
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants, and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Treatment of Transactions. Each of the undersigned elects that
the consummation of the transactions contemplated by the Merger and Contribution
Agreement and the other agreements contemplated by the Merger and Contribution
Agreement, including but not limited to the Liquidation Agreement, will not be
deemed a liquidation for purposes of Sections 3.1 and 3.2 of the Statement with
Respect to Shares filed by Zynaxis in the Department of State of the
Commonwealth of Pennsylvania on April 6, 1995.
2. Consent to Secured Loan. Each of the undersigned consents to
the Secured Loan and all liens, pledges, mortgages, security interests and other
encumbrances to which the assets or properties of Zynaxis may become subject as
part of the Secured Loan.
3. Exchange of Warrants. Each of the undersigned agrees that upon
consummation of the merger between Zynaxis and Vaxcel Merger Sub pursuant to the
Merger and Contribution Agreement (the "Merger"), each Warrant held by the
undersigned shall be exchanged for a new warrant substantially in the form
attached hereto as Exhibit B to purchase a number of shares of Vaxcel Common
Stock equal to: (i) the number of shares of Common Stock of Zynaxis as the
Warrants held by such undersigned are exercisable to purchase at that time
multiplied by (ii) the Exchange Ratio (the "New Warrant"). Each of the
undersigned Securityholders agrees that such undersigned Securityholder shall
surrender the Warrants held by such undersigned Securityholder and shall receive
in exchange therefor a New Warrant. Zynaxis shall not honor any warrant
agreement representing a Warrant after the Merger.
4. Termination of Preferred Stock and Warrant Purchase Agreement
and Registration Rights. Each of the undersigned agrees that the Preferred Stock
and Warrant Purchase Agreement and all rights of the Securityholders thereunder
shall terminate upon the Merger. Each of the undersigned further agrees that:
(i) upon execution of this Agreement all rights that the undersigned
Securityholder may have to require Zynaxis to register securities of Zynaxis for
sale under applicable state and federal securities laws, whether granted
pursuant to the Preferred Stock and Warrant Agreement or otherwise
("Registration Rights"), are suspended pending the Merger, and (ii) upon
occurrence of the Merger all such Registration Rights will be terminated and
such Securityholder will have such Registration Rights as are provided for such
Securityholder in the Merger and Contribution Agreement. If the Merger and
Contribution Agreement is terminated for any reason, beginning at the time of
such termination the undersigned Securityholder shall have such Registration
Rights as such Securityholder would have had at such time if such Registration
Rights had not been suspended pursuant to the preceding sentence.
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5. Accredited Investor Status of Securityholder. Each of the
undersigned Securityholders represents and warrants to CytRx, Vaxcel and Zynaxis
that he or it is an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
and that he or it is acquiring New Warrants for himself or itself and not for
other persons. Each Securityholder understands that the New Warrants and any
Securities purchased upon exercise of New Warrants (the "Warrant Securities")
have not been registered under the Securities Act and, therefore, cannot be
resold unless such Warrant Securities are registered under the Securities Act or
unless an exemption from such registration is available.
6. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to Zynaxis, CytRx or
Vaxcel, to the address set forth in Section 11.8 of the Merger and Contribution
Agreement; and (ii) if to a Securityholder, to its address shown below its
signature on the last page hereof.
7. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
9. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
11. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise, by any of the parties without the prior
written consent of the other parties. Any assignment in violation of the
foregoing shall be void.
12. Equitable Remedies. Each Securityholder agrees that
irreparable damage would occur and that CytRx and Vaxcel would not have any
adequate remedy at law in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that CytRx and Vaxcel shall be entitled to an
injunction or injunctions to prevent breaches by a Securityholder of this
Agreement and to enforce specifically the terms and provisions of this
Agreement.
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13. Severability. If any term, provision, covenant or restriction
herein, or the application thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions herein and
the application thereof to any other circumstances, shall remain in full force
and effect, shall not in any way be affected, impaired or invalidated, and shall
be enforced to the fullest extent permitted by law.
14. Defined Terms. Capitalized terms used in this Agreement but
not defined herein shall have the meanings given such terms in the Merger and
Contribution Agreement.
[Remainder of page intentionally left blank.]
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[FIRST OF THREE SIGNATURE PAGES TO PREFERRED STOCK AND WARRANT AGREEMENT
DATED NOVEMBER _, 1996]
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
under seal as of the day and year first above written.
ZYNAXIS, INC. CYTRX CORPORATION
By: By:
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Name: Name:
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Title: Title:
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VAXCEL, INC. S.R. ONE, LTD.
By: By:
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Name: Name:
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Title: Title:
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Address:
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EUCLID PARTNERS III, L.P. ALPHI FUND L.P.
By: By: Alphi Investment
------------------------------- Management Company,
Name: General Partner
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Title:
----------------------------
By:
--------------------------
Address: Name:
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Title:
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-------------------------- Address:
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JAVELIN CAPITAL FUND, L.P.
By:
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Name:
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Title:
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Address:
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[SECOND OF THREE SIGNATURE PAGES TO PREFERRED STOCK AND WARRANT AGREEMENT
DATED NOVEMBER _, 1996]
SENMED MEDICAL VENTURES CIP CAPITAL L.P.
By: CIP Capital Management
Inc.,
General Partner
By: By:
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Name: Name:
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Title: Title:
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Address: Address:
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THE WEST COMPANY XXXXXXX X. XXXXXXX, III
By: By:
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Name: Name:
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Title: Title:
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Address: Address:
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BIOTECHNOLOGY VENTURE COMMONWEALTH VENTURE
FUND S.A. PARTNERS I, L.P.
By: By:
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Name: Name:
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Title: Title:
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Address: Address:
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[THIRD OF THREE SIGNATURE PAGES TO PREFERRED STOCK AND WARRANT AGREEMENT DATED
NOVEMBER _, 1996]
PLEXUS VENTURES, INC. PHILADELPHIA VENTURES - JAPAN I,
L.P.
By: By:
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Name: Name:
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Title: Title:
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Address: Address:
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GROTECH PARTNERS II, L.P. GROTECH PARTNERS III, L.P.
GROTECH III COMPANION FUND, L.P.
By: Mid Atlantic Ventures II, L.P., GROTECH III PENNSYLVANIA FUND, L.P.
General Partner
By: Grotech Capital Group, Inc.,
By: Grotech Capital Group, Inc., General Partner
General Partner
By: By:
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Name: Name:
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Title: Title:
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Address: Address:
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Dr. Xxx X. Xxxxxx
Address:
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EXHIBIT A
HOLDERS OF PREFERRED STOCK AND WARRANTS ISSUED BY
ZYNAXIS, INC.
SERIES A
NAME SHARES WARRANTS
---- ------ --------
Euclid Partners III, L.P. 260,000 680,775
S.R. One, Ltd. 257,500 540,000
Javelin Capital Fund, L.P. 250,000 500,000
Alphi Fund L.P. 150,000 300,000
Senmed Medical Ventures 135,000 270,000
The West Company 125,000 250,000
Xxxxxxx X. Xxxxxxx, III 55,000 110,000
Biotechnology Venture Fund S.A. 50,000 100,000
CIP Capital L.P. 45,000 265,000
Grotech Partners III, L.P. 26,490 52,980
Plexus Ventures, Inc. 25,000 150,000
Dr. Xxx X. Xxxxxx 12,500 25,000
Commonwealth Venture Partners I, L.P. 10,000 20,000
Grotech Partners II, L.P. 3,455 6,910
Grotech III Companion Fund, L.P. 3,155 6,310
Philadelphia Ventures - Japan I, L.P. 2,500 5,000
Grotech III Pennsylvania Fund, L.P. 1,900 3,800
Totals 1,412,500 3,285,775
