EXHIBIT 7.10
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 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
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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 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 efforts 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.
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(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 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.
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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.
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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