Exhibit 10.117
PROCESS AGREEMENT
This PROCESS AGREEMENT (this "Agreement") dated as of October 16,
2002 is made between Nexell Therapeutics Inc., a Delaware corporation (the
"Company"), and Xxxxxx International Inc., a Delaware corporation, and Xxxxxx
Healthcare Corporation, a Delaware corporation (together, "Baxter").
WHEREAS, on May 15, 2002, the Company announced that it was
commencing a wind down of its operations; and
WHEREAS, the Company has been exploring alternatives available to
it in effecting the wind-down, including liquidation or reorganization under the
federal bankruptcy code, dissolution under Delaware law or other process or
transaction; and
WHEREAS, the liquidation preference of the Company's outstanding
Cumulative Convertible Series A Preferred Stock ("Series A Preferred Stock") and
Cumulative Convertible Series B Preferred Stock ("Series B Preferred Stock") is
in the aggregate amount of approximately $150,500,000, which is substantially in
excess of the value of the Company's assets; and
WHEREAS, the Company and Baxter agree that it is in the Company's
best interest to preserve the maximum value of the Company's assets by promptly
winding up the Company's affairs and commencing an orderly liquidation of its
assets, and in connection therewith, Baxter has agreed to a cash distribution to
the holders of common stock, par value $.001 per share ("Common Stock") other
than Baxter, subject to certain conditions; and
WHEREAS, the Company and Baxter desire to confirm certain
understandings in connection with the foregoing.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements contained herein, the parties agree as follows:
Section 1. Liquidation. Promptly following, concurrently with,
or immediately prior to the execution of this Agreement, the Company, acting
through its Board of Directors, will vote on a resolution approving this
Agreement, including the adjustment of the Series B Preferred Stock conversion
price as provided herein, deeming it advisable that the Company be dissolved and
approving and adopting a plan of complete liquidation and dissolution of the
Company in the form attached as Exhibit A (the "Plan"), and approving the form
of an Information Statement as contemplated by Section 3. In the event that the
Board of Directors shall not approve all of the foregoing within 3 days of the
date hereof, this Agreement shall be null and void. Subject to the approval of
the Plan by the Company's stockholders as contemplated by Section 2 below and
Xxxxxx'x compliance with its obligations hereunder, the Company agrees to take
any and all action necessary to carry out the terms and the intent of the Plan
and to effect the liquidation of the Company as contemplated thereby and by the
Timetable previously exchanged by the parties (the "Timetable"), recognizing
that the dates are estimates and are subject to factors outside the control of
the parties. Notwithstanding the liquidation preference of the holders of Series
A Preferred Stock and Series B Preferred Stock, Baxter
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agrees, and if deemed necessary by the Company, shall secure the consent of all
the holders of Series B Preferred Stock, that pursuant to the Plan the Company
may make a liquidating distribution or distributions to the holders of Common
Stock (other than Baxter) in an amount of $0.05 per share (but not to exceed an
aggregate of $872,026 to all such holders of Common Stock), and that such
preferred holders shall waive any provisions in the Company's Certificate of
Incorporation, including any Certificate of Designation, the Securities
Agreement dated November 24, 1999, the Registration Rights Agreement dated
November 24, 1999 and any other agreements or rights they may otherwise have as
necessary to permit such distribution and the other transactions expressly
contemplated by the Plan, including but not limited to, any right of holders of
Series B Preferred Stock to "Common Equivalent Dividends" as defined in the
Company's Certificate of Designation filed with the Delaware Secretary of State
on November 24, 1999 and any rights resulting or arising by virtue of any unpaid
past, current or future semi-annual cash dividends with respect to the Series B
Preferred Stock.
Section 2. Information Statement. Promptly following adoption
of the Plan by the Board of Directors of the Company, the Company shall prepare
and file with the Securities and Exchange Commission (the "SEC") a preliminary
Information Statement in form reasonably satisfactory to the parties hereto and
shall use its best efforts to respond to any comments of the SEC or its staff,
and, to the extent permitted by law, to cause such Information Statement to be
mailed to the Company's stockholders as promptly as practicable after responding
to all such comments to the satisfaction of the staff. The Company shall notify
Baxter promptly of the receipt of any comments from the SEC or its staff and of
any request by the SEC or its staff for amendments or supplements to such
Information Statement or for additional information and will promptly supply
Baxter with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to such Information Statement or the Plan.
Section 3. Shareholder Consent. Promptly following the
resolution of any comments from the SEC regarding the Information Statement, the
Company shall take such actions as are necessary to set a record date for a
written stockholder consent approving the Plan and shall request Baxter to
execute or cause to be executed a consent as provided in Section 4.
Section 4. Shareholder Approval. Baxter agrees to execute or
cause to be executed (and not revoke) a written consent in favor of the Plan,
which consent shall represent a majority of outstanding shares of Common Stock
as contemplated by Section 6 below.
Section 5. Put. Baxter shall obtain the right to acquire all of
the issued and outstanding shares of the Series B Preferred Stock. Baxter agrees
to acquire the Series B Preferred Stock (and the associated Class A Warrants and
Class B Warrants, which Baxter agrees it will not exercise at any time unless
the Plan is not carried out as contemplated hereby) and to exercise or cause to
be exercised those certain put rights issued by Xxxxxx International Inc. on
November 24, 1999 on a date (the "Put Exercise Date") no later than immediately
prior to the record date for the stockholder consent. In consideration of the
benefits afforded to the Company and the holders of its Common Stock pursuant to
this Agreement and the Plan, the Company agrees to the acceleration of the
exercisability of such put rights to the Put Exercise Date. Baxter and the
Company agree that, pursuant to the terms of that certain Side Letter Agreement
dated November 24, 1999, among Baxter, the Company and certain other parties
(the "Side Letter"), the conversion price of the Series B Preferred Stock is
hereby adjusted to a price
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equal to $0.09 per share of Common Stock, effective as of the Put Exercise Date.
Baxter agrees that it will not exercise at any time the warrant issued by the
Company to Baxter on May 28, 1999 unless the Plan is not carried out as
contemplated hereby.
Section 6. Conversion. Following the exercise of the put rights
and no later than immediately prior to the record date for the stockholder
consent, Baxter shall convert or cause to be converted so much of the Series B
Preferred Stock as would be necessary for Baxter, its affiliates and assignees
to be the record holder of a majority of the then outstanding shares of Common
Stock (the date of such conversion being referred to herein as the "Conversion
Date"). The remaining Series B Preferred Stock and all of the Series A Preferred
Stock would not be converted to Common Stock and would remain outstanding,
retaining its liquidation preference.
Section 7. Timetable. The parties agree to cooperate with each
other and use commercially reasonable effort to effect the actions set forth on
the Timetable as soon as practicable.
Section 8. Board of Directors. Immediately after the approval
by the Board of Directors of the Plan, this Agreement, the adjusted Series B
Preferred Stock conversion price and the form of the Information Statement,
Xxxxxx X. Xxxxxxx shall be appointed to the Board of Directors to serve through
the final distribution of the Company's assets as contemplated by the Plan.
Section 9. Additional Limitation. Notwithstanding the
provisions contained in Section 10 of the Plan, the Company shall not pay,
authorize or enter into any arrangement for compensation or other payments
within the scope of Section 10 of the Plan in excess of the estimated amounts
set forth in Schedule F to the Plan without the consent of Baxter, which consent
shall not be unreasonably withheld.
Section 10. Valuation. The Company shall deliver to Baxter a
copy of the determinations of fair market value by the Board of Directors
contemplated by Section 3(d) of the Plan.
Section 11. Conditions to Xxxxxx'x Obligations. The obligations
of Baxter contained in Sections 4, 5 and 6 above shall be subject to the
compliance by the Company of all of its obligations hereunder.
Section 12. Representations and Warranties. (a) The Company
represents and warrants to Baxter that (1) the Company is a corporation duly
organized and validly existing under the laws of the State of Delaware, (2) the
Company has taken all corporate action necessary for it to execute, deliver and
perform this Agreement (subject to Section 4 hereof), (3) the Company has full
power and authority to enter into this Agreement and perform its obligations
hereunder and (4) this Agreement is the valid and legally binding agreement of
the Company enforceable in accordance with its terms.
(b) The Company represents and warrants to Baxter that: (1) it
has provided to Baxter a cash analysis setting forth the cash currently
available or estimated to become available to the Company from the collection or
disposition of assets, the application of such available cash for the settlement
of liabilities, claims and obligations, the payment of the continuing
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expenses of the liquidation and the amount of cash remaining for distribution to
the stockholders of the Company and an analysis of the claims and obligations of
the Company of the nature described in Paragraph 3(c) of the Plan (the "Cash and
Claims Analysis") and (2) it has provided to Baxter a list of patents and patent
applications owned or held by the Company (the "Patent List"). The Company
represents and warrants to Baxter that (1) to the Company's knowledge, the Cash
and Claims Analysis, the Patent List and each of the Schedules attached to the
Plan set forth in all material respects a true, correct, complete and accurate
description of the information purported to be set forth therein, and (2) to the
Company's knowledge none of the information in the Cash and Claims Analysis, the
Patent List or any such Schedule is false or misleading in any material respect
or omits to state a fact necessary to make the statements therein not misleading
in any material respect.
(c) Xxxxxx represents and warrants to the Company that (1)
Baxter is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, (2) Baxter has taken all corporate
action necessary for it to execute, deliver and perform this Agreement, (3)
Baxter has full power and authority to enter into this Agreement and perform its
obligations hereunder and (4) this Agreement is the valid and legally binding
agreement of Baxter enforceable in accordance with its terms.
Section 13. Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
Section 14. Assignment. Neither party hereto may assign or
transfer this Agreement without the prior written consent of the other party
hereto; provided, however, that either party hereto may assign this Agreement to
any person or entity with or into which such party may merge or consolidate or
to whom all or substantially all of its assets or businesses may be sold; and
provided further that Baxter may assign this Agreement to any wholly-owned
subsidiary of Baxter, or to any other person to which Baxter and its affiliates
shall transfer all of their interest in the capital stock of the Company and
which shall assume and be bound by all of the obligations of and restrictions on
Baxter hereunder, including, without limitation, Section 5 hereof, provided that
the foregoing shall not relieve Baxter of its obligations hereunder.
Section 15. Entire Agreement. This Agreement sets forth the
entire understanding of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, written and oral, among the parties
hereto as to such subject matter.
Section 16. Waiver. The waiver by either party hereto of any
breach of any provision of this Agreement shall not constitute or operate as a
waiver of any other breach of such provision or of any other provision hereof,
nor shall any failure to enforce any provision hereof operate as a waiver of
such provision or of any other provision hereof.
Section 17. Expenses. Except as expressly provided in this
Agreement and subject to any rights based on a breach of this Agreement, each
party hereto shall bear its own costs and expenses incident hereto.
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Section 18. Amendments. This Agreement may not be amended, nor
may any provision hereof be modified or waived, except by an instrument in
writing duly signed by all parties hereto.
Section 19. Severability. If any provision of this Agreement
shall be held invalid, illegal or unenforceable, the validity, legality or
enforceability of the other provisions hereof shall not be affected thereby, and
there shall be substituted for the provision at issue a valid and enforceable
provision as similar as possible to the provision at issue.
Section 20. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
reference to the principles of conflict of laws thereof.
Section 21. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect the meaning,
interpretation, enforceability or validity of this Agreement.
Section 22. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which taken together shall constitute one and the same document.
Section 23. No Third Party Beneficiaries. Nothing in this
Agreement, express or implied, is intended to confer or does confer on any
person or entity, other than the parties hereto and their respective successors
and permitted assigns, any rights or remedies under or by reason of this
Agreement.
* * * * * *
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IN WITNESS WHEREOF, the Company and Baxter have each caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
NEXELL THERAPEUTICS INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer
XXXXXX INTERNATIONAL INC.
By: /s/ Xxx Xxxxx Xxxx
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Name: Xxx Xxxxx Xxxx
Title: Corporate Secretary
XXXXXX HEALTHCARE CORPORATION
By: /s/ Xxx Xxxxx Xxxx
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Name: Xxx Xxxxx Xxxx
Title: Secretary
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