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EXHIBIT 7
Preferred Stock and Warrant Agreement
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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.
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
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Agreement, will not be deemed a liquidation for purposes of Sections 3.1 and 3.2
of the Statement with Respect to Shares filed by Zynaxis in the Department of
State of the Commonwealth of Pennsylvania on April 6, 1995.
2. Consent to Secured Loan. Each of the undersigned consents to the
Secured Loan and all liens, pledges, mortgages, security interests and other
encumbrances to which the assets or properties of Zynaxis may become subject as
part of the Secured Loan.
3. Exchange of Warrants. Each of the undersigned agrees that upon
consummation of the merger between Zynaxis and Vaxcel Merger Sub pursuant to the
Merger and Contribution Agreement (the "Merger"), each Warrant held by the
undersigned shall be exchanged for a new warrant substantially in the form
attached hereto as Exhibit B to purchase a number of shares of Vaxcel Common
Stock equal to: (i) the number of shares of Common Stock of Zynaxis as the
Warrants held by such undersigned are exercisable to purchase at that time
multiplied by (ii) the Exchange Ratio (the "New Warrant"). Each of the
undersigned Securityholders agrees that such undersigned Securityholder shall
surrender the Warrants held by such undersigned Securityholder and shall receive
in exchange therefor a New Warrant. Zynaxis shall not honor any warrant
agreement representing a Warrant after the Merger.
4. Termination of Preferred Stock and Warrant Purchase Agreement and
Registration Rights. Each of the undersigned agrees that the Preferred Stock
and Warrant Purchase Agreement and all rights of the Securityholders thereunder
shall terminate upon the Merger. Each of the undersigned further agrees that:
(i) upon execution of this Agreement all rights that the undersigned
Securityholder may have to require Zynaxis to register securities of Zynaxis for
sale under applicable state and federal securities laws, whether granted
pursuant to the Preferred Stock and Warrant Agreement or otherwise
("Registration Rights"), are suspended pending the Merger, and (ii) upon
occurrence of the Merger all such Registration Rights will be terminated and
such Securityholder will have such Registration Rights as are provided for such
Securityholder in the Merger and Contribution Agreement. If the Merger and
Contribution Agreement is terminated for any reason, beginning at the time of
such termination the undersigned Securityholder shall have such Registration
Rights as such Securityholder would have had at such time if such Registration
Rights had not been suspended pursuant to the preceding sentence.
5. Accredited Investor Status of Securityholder. Each of the
undersigned Securityholders represents and warrants to CytRx, Vaxcel and Zynaxis
that he or it is an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
and that he or it is acquiring New Warrants for himself or itself and not for
other persons. Each Securityholder understands that the New Warrants and any
Securities purchased upon exercise of New Warrants (the "Warrant Securities")
have not been registered under the Securities Act and, therefore, cannot be
resold unless such Warrant Securities are registered under the Securities Act or
unless an exemption from such registration is available.
6. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to Zynaxis, CytRx or
Vaxcel, to the address set forth in Section 11.8 of the Merger and Contribution
Agreement; and (ii) if to a Securityholder, to its address shown below its
signature on the last page hereof.
7. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
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8. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.
9. Entire Agreement. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement, and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof.
10. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Pennsylvania, regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
11. Assignment. Neither this Agreement nor any of the rights, interests
or obligations under this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise, by any of the parties without the prior written
consent of the other parties. Any assignment in violation of the foregoing
shall be void.
12. Equitable Remedies. Each Securityholder agrees that irreparable
damage would occur and that CytRx and Vaxcel would not have any adequate remedy
at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that CytRx and Vaxcel shall be entitled to an injunction
or injunctions to prevent breaches by a Securityholder of this Agreement and to
enforce specifically the terms and provisions of this Agreement.
13. Severability. If any term, provision, covenant or restriction
herein, or the application thereof to any circumstance, shall, to any extent, be
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions herein and
the application thereof to any other circumstances, shall remain in full force
and effect, shall not in any way be affected, impaired or invalidated, and shall
be enforced to the fullest extent permitted by law.
14. Defined Terms. Capitalized terms used in this Agreement but not
defined herein shall have the meanings given such terms in the Merger and
Contribution Agreement.
[Remainder of page intentionally left blank.]
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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: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxxxx Name: Xxxx X. Xxxxxxx
Title: Chairman, President and CEO Title: Chairman, President and CEO
VAXCEL, INC. S.R. ONE, LTD.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
Name: Xxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
Title: President and CEO Title: Vice President
Address: 000 X. Xxxxxxxxxx Xxxx
Xx. 000
Xxxxx, XX 00000
EUCLID PARTNERS III, L.P. ALPHI FUND L.P.
By: /s/ Xxxxxxx X. Xxxxx By: Alphi Investment Management
Company, General Partner
Name: Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
Title: General Partner of Name: Xxxxxx X. Xxxxx
Euclid Associates III, L.P., Title: President
General Partner
Address: Euclid Partners Corp. Address: 000 Xxxxxxxxx Xxxx
00 Xxxxxxxxxxx Xxxxx Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxxxxx, XX 00000
JAVELIN CAPITAL FUND, L.P.
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: General Partner
Address: 0000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
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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: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxx
Title: Vice President, Title: President
Business Development
Address: 0000 Xxxx Xxxxxx Xxxxx, Address: 00 Xxxxxx Xxxxxx Xxxxxxx
#000 Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
THE WEST COMPANY XXXXXXX X. XXXXXXX, III
By: /s/ Xxxxxx X. Xxxxx Xx. Ph.D. By: /s/ Xxxxxxx X. Xxxxxxx, III
Name: Xxxxxx X. Xxxxx Xx. Ph.D. Name:
Title: Corporate V.P. - Title:
Scientific Services
Address: 000 Xxxxxx Xxxxx Xxxxxxx:
Xxxxxxxxx XX 00000
BIOTECHNOLOGY VENTURE COMMONWEALTH VENTURE
FUND S.A. PARTNERS I, L.P.
By: /s/ M.-Rose DOCK /s/ Xxxxxxx XXXX By: /s/ Xxxxxxx X. Xxxxxx
Name: M.-Rose DOCK Xxxxxxx XXXX Name: Xxxxxxx X. Xxxxxx
Title: Liquidator Mandatory Title: General Partner
Address: 231 Val des Bons-Malades Address: Philadelphia Ventures
L - 2121 LUXEMBOURG The Belleveu
000 X. Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
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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: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: President Title: General Partner
Address: 0000 Xxxxxx Xxxxxxx West Address: Philadelphia Ventures
Building 18, Suite 000 Xxx Xxxxxxxx
Xxxx Xxxx, XX 00000 000 X. Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
GROTECH PARTNERS II, L.P. GROTECH PARTNERS III, L.P.
GROTECH III COMPANION FUND, L.P.
By: Mid Atlantic Ventures II, L.P., GROTECH III PENNSYLVANIA FUND, L.P.
General Partner
By: Grotech Capital Group, Inc.,
By: Grotech Capital Group, Inc., General Partner
General Partner
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Treasurer Title: Treasurer
Address: 0000 Xxxxxxx Xx. Address: 0000 Xxxxxxx Xx.
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
/s/ Xxx X. Xxxxxx, M.D.
Dr. Xxx X. Xxxxxx
Address: 000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
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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
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EXHIBIT B
THE WARRANTS REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE WARRANTS MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM.
THE WARRANTS REPRESENTED HEREBY AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE
WARRANTS REPRESENTED HEREBY (INCLUDING ANY HOLDERS) ARE BOUND BY THE TERMS OF A
PREFERRED STOCK AND WARRANT AGREEMENT DATED DECEMBER 6, 1996 AMONG ZYNAXIS,
INC., A PENNSYLVANIA CORPORATION, CYTRX CORPORATION, A DELAWARE CORPORATION,
VAXCEL, INC., A DELAWARE CORPORATION, AND THE HOLDERS OF SHARES OF SERIES A
CONVERTIBLE PREFERRED STOCK OF ZYNAXIS, INC. (THE "PREFERRED STOCK AND WARRANT
AGREEMENT") (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).
Void after 5:00 p.m. (Eastern Standard Time), on the last
day of the Warrant Term, as provided herein.
Date: ____________, 1996 Warrant to
Purchase __________
Shares of Common Stock
WARRANT
TO PURCHASE COMMON STOCK OF
VAXCEL, INC.
THIS CERTIFIES THAT, FOR VALUE RECEIVED, ______________ or such person's
registered assigns (herein called "Warrant Holder"), is the holder of a warrant
(this "Warrant") to purchase, subject to the provisions of this Warrant, from
Vaxcel, Inc., a Delaware corporation (the "Company"), at any time and from time
to time during the Warrant Term, _______ fully paid, validly issued and
nonassessable shares of Common Stock, par value $.001 per share, of the Company
("Common Stock"), at the Warrant Price. The Warrant Price and number and kind
of securities issuable hereunder are subject to adjustment as provided herein.
1. Definitions. For the purpose of this Warrant:
(a) "Additional Shares of Capital Stock" means all shares of capital
stock issued by the Company, except shares of capital stock of the Company
issued and outstanding at the time of issuance of this Warrant or expressly
authorized to be issued in the future pursuant to any contract, option, warrant
or benefit or compensation plan in existence and/or outstanding at the time of
issuance of this Warrant.
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(b) "Capital Stock" means the Company's Common Stock, and any other
stock of any class, whether now or hereafter authorized, which has the right to
participate in the distribution of earnings and assets of the Company without
limit as to amount or percentage.
(c) "Merger and Contribution Agreement" means that certain Agreement
and Plan of Merger and Contribution entered into by and among CytRx
Corporation, a Delaware corporation, the Company, Vaxcel Merger Subsidiary,
Inc., a Georgia corporation, and Zynaxis, Inc., a Pennsylvania corporation.
(d) "Per Share Price" means the Per Share Price as defined in the
Merger and Contribution Agreement.
(e) "Warrants" mean the warrants to purchase Common Stock of the
Company issued by the Company pursuant to the Preferred Stock and Warrant
Agreement and any and all warrants which are issued in exchange or substitution
for any outstanding Warrant pursuant to the terms of that Warrant.
(f) "Warrant Price" means the price per share at which shares of
Common Stock are purchasable hereunder, as such price may be adjusted from time
to time hereunder. The Warrant Price shall initially be equal to: (i) the Per
Share Price divided by (ii) the Exchange Ratio, and beginning at 5:00 p.m.
Eastern Time on the sixtieth (60th) day following the Closing Date, as such term
is defined in the Merger and Contribution Agreement, shall be equal to two (2)
times the Warrant Price in effect immediately prior to such time.
(g) "Warrant Shares" mean shares of Common Stock or other securities
purchased upon exercise of this Warrant.
(h) "Warrant Term" means a period of one year commencing on the
Closing Date and ending at 5:00 p.m. Eastern Time on the first anniversary of
the Closing Date, as such term is defined in the Merger and Contribution
Agreement.
2. Exercise of Warrants. This Warrant may be exercised during the Warrant
Term in whole or in part by the surrender of the Warrant, with the purchase
agreement attached hereto as Exhibit A properly completed and executed, at the
principal office of the Company at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx
00000 or such other location which shall at that time be the principal office of
the Company (the "Principal Office"), and upon payment to it by certified check
or bank draft to the order of the Company for the purchase price for the shares
to be purchased upon such exercise. The persons entitled to the shares so
purchased shall be treated for all purposes as the holders of such shares as of
the close of business on the date of exercise and certificates for the shares of
stock so purchased shall be delivered to the persons so entitled within a
reasonable time, not exceeding thirty (30) days, after such exercise. Unless
this Warrant has expired, a new Warrant of like tenor and for such number of
shares as the holder of this Warrant shall direct, representing in the aggregate
the right to purchase a number of shares with respect to which this Warrant
shall not have been exercised, shall also be issued to the holder of this
Warrant within such time.
3. Exchange. This Warrant is exchangeable from the date hereof until the
expiration of the Warrant Term, upon the surrender thereof by the holder thereof
at the Principal Office, for new
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Warrants of like tenor registered in such holder's name and representing in the
aggregate the right to purchase the number of shares purchasable under the
Warrant being exchanged, each of such new Warrants to represent the right to
subscribe for and purchase such number of shares as shall be designated by said
holder at the time of such surrender.
4. Transfer. The transferability of this Warrant and the Warrant Shares
are subject to the restrictions on transfer set forth below:
(a) Registration Restrictions. This Warrant and any Warrant Shares
that may be issued upon exercise thereof have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to the exemption provided in Section 4(2) thereof, and
have not been registered under state securities laws by reason of their issuance
in a transaction exempt from such registration requirements. This Warrant and
such Warrant Shares may not be sold, transferred or otherwise disposed of unless
registered under the Securities Act and applicable state securities laws (the
Company being under no obligation so to register such Warrant or Warrant Shares
except as set forth in the Merger and Contribution Agreement) or exempted from
such registration. Warrant Shares issuable upon exercise of this Warrant will
bear a legend to this effect. The restrictions contained herein shall be
binding on any transferee of this Warrant and the Company may require any such
transferee to execute an instrument agreeing in writing to be so bound by these
restrictions as a condition to transfer.
(b) Notice of Transfer and Opinion of Counsel. Warrant Holder agrees
that, prior to any transfer of this Warrant, such holder will give written
notice to the Company of such holder's intention to effect such transfer and to
comply in all other respects with the provisions of this Section 4. Each such
notice shall contain (i) a statement setting forth the intention of such
holder's prospective transferee with respect to its retention or disposition of
this Warrant, and (ii) unless waived by the Company, an opinion of counsel for
such holder (who may be the inside or staff counsel employed by such holder), as
to the necessity or non-necessity for registration under the Securities Act and
applicable state securities laws in connection with such transfer and stating
the factual and statutory bases relied upon by counsel. The following
provisions shall then apply:
(A) If in the opinion of counsel for the Company the proposed
transfer of this Warrant may be effected without registration or qualification
under the Securities Act and any applicable state securities laws, then the
registered holder of this Warrant shall be entitled to transfer this Warrant in
accordance with the intended method of disposition specified in the statement
delivered by such holder to the Company.
(B) If in the opinion of counsel for the Company the proposed
transfer of this Warrant may not be effected without registration under the
Securities Act or registration or qualification under any applicable state
securities laws, the registered holder of this Warrant shall not be entitled to
transfer this Warrant until the requisite registration or qualification is
effective.
(c) Transfer. Subject to the restrictions on transfer set forth in
this Section 4 and in Section 11 hereof, this Warrant is transferable, in whole
or in part, at the Principal Office by the registered holder thereof, in person
or by duly authorized attorney, upon presentation of this Warrant, properly
endorsed, for transfer. Each holder of this Warrant, by holding it, agrees that
this Warrant, when endorsed in blank, may be deemed negotiable, and that the
holder thereof, when
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the Warrant shall have been so endorsed, may be treated by the Company and all
other persons dealing with the Warrant as the absolute owner thereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer thereof on the books of the Company, any notice to
the contrary notwithstanding.
5. Certain Covenants of the Company. The Company covenants and agrees that
all shares which may be issued upon the exercise of this Warrant, will, upon
issuance, be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issue thereof; and without
limiting the generality of the foregoing, the Company covenants and agrees that
it will from time to time take all such action as may be required to assure that
the par value per share of the Common Stock is at all times equal to or less
than the then effective purchase price per share of the Common Stock issuable
pursuant to this Warrant. The Company further covenants and agrees that during
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have authorized, and reserved for the purpose of
issue upon exercise of the purchase rights evidenced by this Warrant, a
sufficient number of shares of its Common Stock to provide for the exercise of
the rights represented by this Warrant.
6. Adjustments of Warrant Price. In the event that the Company at any time
or from time to time after the issuance of the Warrants shall declare any
dividend on the Common Stock payable in Common Stock or in any right to acquire
Common Stock for any consideration less than the Warrant Price, or shall effect
a subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock (by stock split, reclassification or otherwise than by
payment of a dividend in Common Stock or in any right to acquire Common Stock),
or in the event the outstanding shares of Common Stock shall be combined or
consolidated, by reverse stock split, reclassification or otherwise, into a
lesser number of shares of Common Stock, then the Warrant Price shall,
concurrently with the effectiveness of such event, be proportionately decreased
or increased, as appropriate, to avoid dilution of the exercise rights
hereunder. In the event that the Company shall declare or pay any dividend on
the Common Stock payable in any right to acquire Common Stock for no
consideration, then the Company shall be deemed to have made a dividend payable
in Common Stock in an amount of shares equal to the maximum number of shares
issuable upon exercise of such rights to acquire Common Stock. The Warrant
Price will be adjusted on a weighted-average basis in the event of the sale of
Additional Shares of Capital Stock for consideration less than the Warrant Price
(except in connection with corporate partnership or research and development
agreements). For the purposes of this Section 6, the value of consideration
other than cash received for the issuance of Additional Shares of Capital Stock
shall be computed at the fair value thereof at the time of such issuance, as
determined in good faith by the Board of Directors of the Company.
7. Adjustments for Reclassification and Reorganization. In case of any
reclassification or change of outstanding securities issuable upon exercise of
this Warrant (other than a change in par value, or from par value to no par
value, or from no par value to par value or as a result of a subdivision or
combination) or in case of any consolidation or merger of the Company with or
into another corporation or in case of any sale or transfer to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the Company, or such successor or purchasing corporation, as the case
may be, shall, without payment of any additional consideration therefor, execute
or require the execution of new warrants providing that the holders of the
Warrants shall have the right to exercise such new warrants (upon terms not less
favorable to the holders than those then applicable to the Warrants) and to
receive upon such exercise, in lieu of
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each share of Common Stock theretofore issuable upon exercise of the Warrants,
the kind and amount of shares of stock, other securities, money or property
receivable upon such reclassification, change, consolidation, merger, sale or
transfer by the holder of one share of Common Stock issuable upon exercise of
the Warrants had the Warrants been exercised immediately prior to such
reclassification, change, consolidation, merger, sale or transfer. Such new
warrants shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in Section 6 hereof and this
Section 7. The provisions of this Section 7 shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales and transfers.
8. Notices. Whenever the Warrant Price shall be adjusted pursuant to
Section 6 hereof, or there shall be a reclassification, reorganization or other
event specified in Section 7 hereof, the Company shall promptly prepare a
certificate signed by its President or a Vice President and by its Treasurer or
Assistant Treasurer or its Secretary or Assistant Secretary, setting forth in
reasonable detail, as the case may be, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated,
the Warrant Price after giving effect to such adjustment, and information
regarding the execution of new warrants, and shall promptly cause copies of such
certificate to be mailed (by first class mail and postage prepaid) to the
registered holders of the Warrants.
In the event the Company shall take any action which pursuant to Section 6
may result in an adjustment of the Warrant Price, or pursuant to Section 7 may
result in the execution of new warrants, the Company will give to the registered
holders of the Warrants at their last addresses known to the Company written
notice of such action ten (10) days in advance of its effective date in order to
afford to such holders of the Warrants an opportunity to exercise the Warrants
and to purchase shares of Common Stock of the Company prior to such action
becoming effective.
9. Fractional Shares. No fractional shares of Common Stock will be issued
in connection with any purchase hereunder.
10. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of
reasonable evidence satisfactory to it of the ownership of and the loss, theft,\
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) of reasonable indemnity and (in case of mutilation) upon surrender
and cancellation thereof, the Company will execute and deliver, in lieu thereof
a new Warrant of like tenor.
11. Restrictions on Transfer. This Warrant is, and any Warrant Shares
issued upon the exercise of this Warrant will be, issued subject to the
restrictions on transfer contained in this Warrant or any certificate for
Warrant Shares issued in exchange or substitution for this Warrant or any
outstanding certificate for Warrant Shares and shall bear the restrictive
legend(s), if any, on this Warrant or such outstanding certificate for Warrant
Shares unless, in the opinion of counsel for the Company, such legend(s) may be
removed therefrom.
12. Headings. The description headings of the several sections of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer under its corporate seal, attested by its duly
authorized officer, on the date of this Warrant.
VAXCEL, INC.
By:
As its:
ATTEST:
15
EXHIBIT A
PURCHASE AGREEMENT
Date:___________________
TO:
The undersigned, pursuant to the provisions set forth in the attached
Warrant, hereby agrees to purchase shares of Common Stock covered by such
Warrant, and makes payment herewith in full therefor at the price per share
provided by this Warrant.
Signature:
---------------------------
Address:
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* * *
ASSIGNMENT
For Value Received, _______________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock covered by such
Warrant to:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
, and appoints _____________ Attorney to make such transfer of the books of
Vaxcel, Inc. maintained for such purpose, with full power of substitution in the
premises.
Dated: Signature:
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Witness:
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