EXHIBIT 7.9
SIDE LETTER AGREEMENT
This SIDE LETTER AGREEMENT ("Agreement") dated as of November 24, 1999 is
made between Nexell Therapeutics Inc., a Delaware corporation (the "Company"),
Xxxxxx International Inc., a Delaware corporation ("Baxter"), and, for purposes
of Paragraph 4 hereof only, the other parties signatory hereto.
WHEREAS, in connection with that certain Securities Agreement dated as of
even date herewith between the Company and the purchasers identified in Schedule
1 thereto and in consideration of the repayment by the Company of those certain
convertible subordinated debentures, currently held by Xxxxxx, Xxxxxx is
granting a Put Right as a component of each share of Series B Preferred Stock
purchased at the Private Placement Closing (as described in the Put Agreement
between the Company and Baxter dated of even date herewith (the "Put
Agreement")); and
WHEREAS, in connection with the foregoing, the Company and Baxter are
entering into the Put Agreement, which sets forth certain procedures with
respect to the Private Placement and provides for certain representations and
warranties by each of the Company and Baxter; and
WHEREAS, terms not defined herein shall have the meaning ascribed to them
in the Company's Private Placement Memorandum dated July 1999.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties agree as follows:
1. Conversion Price. The Conversion Price for the Series B Preferred
purchased by Baxter (the "Put Series B Preferred") shall be adjusted on November
24, 2004 (or earlier if 100% of the Series B Preferred are put to Baxter), but
only in the event that an amount in excess of $15,000,000 is purchased by Baxter
(computed on the basis of the liquidation preference for such stock), as
follows: (i) for the Put Series B Preferred in an amount up to $53,000,000
(computed on the basis of the liquidation preference for such stock) (the
"Threshold"), the Conversion Price shall be adjusted to equal the closing price
of the Common Stock on the respective date or dates such Series B Preferred were
purchased by Baxter pursuant to such Put (including purchases below the
$15,000,000 amount) less a discount of 5% (subject to a floor price equal to the
closing price of the Common Stock on November 24, 1999 unless shareholder
approval is obtained if required by the rules of the NASDAQ Stock Market); (ii)
for the Put Series B Preferred in excess of the Threshold, the Conversion Price
shall be adjusted to equal the closing price of the Common Stock on November 24,
1999. The foregoing calculations shall yield a single adjusted Conversion Price
based on a blended, weighted average of the adjustments provided for above.
2. Interest. The dollar amount of the Put Series B Preferred shall be
deemed to accrue interest from the respective date(s) the Series B Preferred is
[are] purchased by Baxter to the date the Conversion Price is determined at a
rate equal to the applicable three year U.S. Treasury Note rate at the date of
each such purchase, plus 100 basis points. Such deemed
accrued interest shall be included in the calculation of the dollar amount of
the Put Series B Preferred then outstanding and thus in the determination of the
number of shares of Common Stock into which the Put Series B Preferred shall
convert (i.e., the accrued interest shall be payable in kind in additional
shares of Series B Preferred, computed on the basis of the then applicable
liquidation preference for the Series B Preferred, and such shares shall have
the adjusted Conversion Price determined in accordance with Paragraph 1 hereof,
if applicable).
3. Shareholder Approval. The Company and Baxter acknowledge and agree
that any adjustment to the Conversion Price will only be made following approval
by the Company's shareholders to the extent required by the rules of The NASDAQ
Stock Market or otherwise. The Company agrees to use reasonable best efforts to
accomplish this, if necessary.
4. Voting Agreement. If the Threshold is met, Xxxxxx'x obligation under
its December 17, 1997 Voting Agreement with the Company and others to vote its
shares of Common Stock in support of nominees for directors of the Company
proposed by the Company's Board of Directors shall terminate, as well as the
irrevocable proxy granted by Baxter to the Chief Executive Officer of the
Company in connection therewith.
5. Alternative Adjustments. Notwithstanding any other provision in this
Agreement to the contrary, in the event the Conversion Price for the Put Series
B Preferred cannot be adjusted as indicated in Paragraph 1 hereof (because, for
example, at the end of the Put Period, at least one holder of the Series B
Preferred has not exercised its Put Right and thus remains a holder of Series B
Preferred, and if it is impermissible under Delaware law or otherwise for the
Conversion Price applicable to such holder to be different than the Conversion
Price applicable to Baxter as the holder of the Put Series B Preferred), then in
such event the Company agrees to take such action as is appropriate to exchange
the Put Series B Preferred (including any shares issued to Baxter under
Paragraph 2 hereof) for an equal number of shares of a new series of preferred
stock of the Company, having identical terms, conditions, preferences and rights
of the Series B Preferred, except that the Conversion Price will reflect the
adjustments provided in Paragraph 1 hereof.
6. Representations and Warranties.
(a) The Company represents and warrants to Baxter that the Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has taken all corporate action necessary
for it to execute, deliver and perform this Agreement (subject to Paragraphs 3
and 5 hereof), and the Company has full power and authority to enter into this
Agreement and perform its obligations hereunder. This Agreement is the valid and
legally binding agreement of the Company enforceable in accordance with its
terms.
(b) Baxter represents and warrants to the Company that Baxter is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Baxter has taken all corporate action necessary for it
to execute, deliver and perform this Agreement, and Baxter has full power and
authority to enter into this Agreement and perform its obligations hereunder.
This Agreement is the valid and legally binding agreement of Baxter enforceable
in accordance with its terms.
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7. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors and
assigns.
8. 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 that Baxter may
assign this Agreement to any wholly-owned subsidiary of Baxter.
9. Entire Agreement. This Agreement, together with the Put Agreement and
the Put Right Certificates, 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.
10. 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.
11. 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.
12. 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
both parties hereto.
13. Notices. All notices and other communications required or permitted to
be given hereunder shall be deemed sufficiently given if sent by certified mail,
postage prepaid, return receipt requested, by facsimile transmission (with
receipt confirmed) or by air courier service (with receipt confirmed), addressed
as follows:
If to the Company:
Nexell Therapeutics, Inc.
0 Xxxxxx
Xxxxxx, XX 00000-0000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxx LLP
000 Xxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxx, Esq.
Facsimile: (000) 000-0000
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If to Baxter:
Xxxxxx International Inc.
One Xxxxxx Parkway
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Attention: Treasurer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx International Inc.
One Xxxxxx Parkway
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
or at such other address as it may have furnished in writing to the other party
hereto.
14. 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.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without reference to the
principles of conflict of laws thereof.
16. 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.
17. 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.
* * *
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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:
Name:
Title:
Xxxxxx International Inc.
By:
Name:
Title:
The provisions of Paragraph 4 hereof are accepted and agreed to:
Xxxxxxx X. Xxxxxxxxx, M.D. Xxxxxx X. Xxxxxxx
Paramount Capital Asset Management Inc.
Xxxxxxx X. Xxxxxxx
By:
Xxxxxxx X. Xxxxxxxxx, M.D.
Xxxxxxxx X. Xxxx
Xxxx X. Xxxx, M.D.
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