XXXXXXXX XXXXXX LLC INTERESTS REDEMPTION AND EXCHANGE AGREEMENT
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THIS XXXXXXXX XXXXXX LLC INTERESTS REDEMPTION AND EXCHANGE
AGREEMENT (this "Agreement") is made and entered into, effective for all
purposes and in all respects, as of August , 1997, by and between (i) XXXXXXXX
XXXXXX L.L.C., a Delaware limited liability company (the "Company"), (ii) AVATEX
CORPORATION (formerly FoxMeyer Health Corporation), a Delaware corporation ("Fox
Health"), (iii) XXXXX XXXXXX ("Xxxxxx"), (iv) XXXXXX X. XXXXXX ("Estrin"), (v)
XXXXXX X. XXXX ("X. Xxxx") and (vi) XXXXXX X.
XXXX and XXXX X. XXXX, tenants by the entirety ("Haft").
RECITALS
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WHEREAS, Fox Health and Haft are members of the Company pursuant to the
Operating Agreement (as defined below);
WHEREAS, on December 18, 1996, Fox Health sent notice to Haft that Fox
Health was triggering the buy-sell provisions of paragraph 14 of the Operating
Agreement (the "Buy-Sell");
WHEREAS, by notice dated December 23, 1996 Haft informed Fox Health
that Haft was disputing certain interpretations of Fox Health's triggering of
the Buy-Sell and that Haft was invoking the arbitration provisions of paragraph
18(l) of the Operating Agreement;
WHEREAS, Fox Health asserts that the Company owes Fox Health the sum of
$3,000,000 pursuant to the "FoxMeyer Note" (as defined in the Operating
Agreement);
WHEREAS, the Company asserts that the FoxMeyer Note has never been
executed and disputes its obligation therefor;
WHEREAS, Fox Health and Haft each acknowledges that, by virtue of the
terms of the Operating Agreement and the Joint Proxy (as defined below), each of
them presently does not possess (i) exclusive voting power control over the
Company or (ii) exclusive voting power or control over either the Stock (as
defined below) or the Proxy Stock (as defined in the Joint Proxy) for which it
or its affiliates is the record owner;
WHEREAS, Fox Health acknowledges that (i) it would be materially
benefited by its acquiring exclusive dominion and control over the Stock, (ii)
the block of shares comprising the Stock have, by virtue of their collective
percentage of the total number of issued and outstanding shares of Phar-Mor,
Inc. stock, an aggregate value in excess of the value that would be
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computed by multiplying the number of such shares by the current trading price
per share of Phar-Mor, Inc. stock, (iii) Fox Health would be materially
benefited by gaining voting power over any shares of Proxy Stock for which it or
its affiliates is the record shareholder, and (iv) Fox Health would be
materially benefited by resolving any disputes concerning collection of the
FoxMeyer Note;
WHEREAS, in resolution of the disputes between Haft and Fox Health
concerning Fox Health's triggering of the Buy-Sell and all other disputes
between them, the parties have mutually agreed for (i) Fox Health to exchange
certain marketable securities for certain other marketable securities owned by
the Company, (ii) the Company to redeem Fox Health's interests in the Company,
and Fox Health has agreed to withdraw from the Company and to have its interests
in the Company completely liquidated by the Company, and the non-withdrawing
members of the Company have caused the Company to agree to liquidate all such
interests of Fox Health in the Company, and (iii) the Company to satisfy the
FoxMeyer Note.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises set forth herein and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending legally to be bound, hereby agree as follows:
1. Recitals. The foregoing recitals are hereby incorporated by reference
in, and made a substantive part of, this Agreement.
2. Definitions. As used herein, the following terms shall have the
following meanings (applicable to both the singular and plural forms thereof):
2.1. "Arbitrator" shall mean the American Arbitration
Association which is administering the pending arbitration proceeding between
Haft and Fox Health brought pursuant to paragraph 18(l) of the Operating
Agreement.
2.2. "Bankruptcy Code" shall mean 11 U.S.C.ss.101 et. seq.
2.3. "Xxxxxx" shall mean Xxxxx Xxxxxx, Co-Chairman of Fo
Health and a member of the Board of Directors of Phar-Mor.
2.4. "Closing" shall have the meaning ascribed to it in
Section 9.1 below.
2.5. "Company's Counsel Opinion" shall mean the legal
opinion of Xxxxxx, Flyer & Xxxxx, counsel to the Company, to be delivered at
Closing in the form of Exhibit A attached hereto.
2.6. "Company Interests" shall mean the Fox Health LLC
Interest.
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2.7. "Company Note" shall mean that certain promissory note
referenced in the Operating Agreement as the "FoxMeyer Note".
2.8. "Credit Lyonnais-Company Pledge" shall mean that certain
Security Agreement (Xxxxxxxx Xxxxxx, L.L.C.) between the Company and Credit
Lyonnais, dated September 6, 1995.
2.9. "Credit Lyonnais-Fox Pledge" shall mean that certain
Security Agreement (FoxMeyer Health Corporation) between Fox Health and Credit
Lyonnais, dated September 6, 1995.
2.10."Credit Lyonnais" shall mean Credit Lyonnais New York
Branch, a duly licensed branch under the New York Banking Law of a foreign
banking corporation organized under the laws of the Republic of France.
2.11."Credit Lyonnais Consent and Termination Agreement" shall
mean a written agreement to be executed at Closing by the Company and Credit
Lyonnais whereby Credit Lyonnais (i) consents to the Company's transfer of the
Distributed Shares, the Exchange Shares and the Payoff Shares to Fox Health
pursuant to Sections 3, 4.2 and 4.3 of this Agreement, (ii) releases the Company
of all of the Company's covenants, undertakings and obligations under, and
terminates, the Credit Lyonnais-Company Pledge, and (iii) releases and
terminates its security interest in the Fox Health LLC Interest (and executes
and delivers to the Company appropriate Forms UCC-3), and the Company provides
Credit Lyonnais with a reciprocal release, all in form and content acceptable to
the Company and its counsel in their reasonable discretion.
2.12.[Intentionally left blank.]
2.13."Delaware Court Order" shall mean an order of the United
States Bankruptcy Court for the District of Delaware in that action styled
Official Committee of Unsecured Creditors of FoxMeyer Corporation et al., v.
FoxMeyer Health Corporation (Adversary No. 96-205), whereby the Court (a)
modifies the Agreed Preliminary Injunction Order entered on March 5, 1997 in
such adversary proceeding (i) to permit Fox Health to enter into, and perform
its obligations under, this Agreement and the other Transaction Documents to
which it is a party, and (ii) to permit the use of $6,060,000 of the funds now
held pursuant to the Escrow Agreement (as defined in the Trustee Settlement
Agreement) to purchase the Exchange Assets; or (b) dissolves the Agreed
Preliminary Injunction Order (without issuing a comparable injunction order in
lieu thereof).
2.14."Distributed Shares" shall mean a number of shares of
common stock, $0.01 par value per share, of Phar-Mor equal to (a) three million
seven hundred fifty thousand (3,750,000) less (b) the number of Payoff Shares
less (c) the number of Exchange Shares. The
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Distributed Shares shall be distributed to Fox Health pursuant to Section 4.2
hereof. The sum of (a) the Distributed Shares plus (b) the Payoff Shares plus
(c) the Exchange Shares shall equal three million seven hundred fifty thousand
(3,750,000).
2.15."Estrin" shall mean Xxxxxx X. Xxxxxx, Co-Chairman of Fox
Health and a member of the Board of Directors of Phar-Mor.
2.16."Exchange Assets" shall mean publicly traded (on the New
York Stock Exchange or the NASDAQ over-the-counter trading system) registered
shares of common stock that are free and clear of any lien, claim, encumbrance
or restriction of any kind whatsoever, which are purchased on the day of Closing
and which cost at least $6,060,000 (including normal brokerage costs) and are to
be assigned to the Company by Fox Health pursuant to Section 3 below. The
Exchange Assets shall be subject to the selection and approval of Haft, in their
reasonable discretion.
2.17."Exchange Shares" shall mean a number of shares of
common stock, $0.01 par value per share, of Phar-Mor calculated by dividing (a)
Six Million Sixty Thousand Dollars ($6,060,000) by (b) the closing trading price
per share of Phar-Mor common stock as reported in The Wall Street Journal for
the day that is five (5) business days prior to Closing (if no trading price is
reported, the closing trading price shall be the average trading price for the
last five (5) business days on which trading occurred).
2.18."Fairness Opinion/FBR" shall mean a written opinion
rendered to the Company and Haft by Xxxxxxxx Xxxxxxxx & Xxxxxx that, as the
result of the Company's (i) distribution of the Distributed Shares to Fox Health
in complete redemption of the Fox Health LLC Interest, (ii) transfer of the
Exchange Shares to Fox Health for the Exchange Assets, and (iii) payment of the
Payoff Shares in full satisfaction of the Company Note, the consideration being
received by Fox Health in exchange for the consideration being transferred by
Fox Health in the aggregate is fair from a financial point of view to Fox
Health. Haft shall be solely responsible for all of the costs and expenses
relating to the preparation and delivery of the Fairness Opinion/FBR.
2.19."Fairness Opinion/Gordian" shall mean a written opinion
rendered to Fox Health by Gordian Group L.P. in the form of Exhibit A-1 attached
hereto that, as the result of the Company's (i) distribution of the Distributed
Shares to Fox Health in complete redemption of the Fox Health LLC Interest, (ii)
transfer of the Exchange Shares to Fox Health for the Exchange Assets, and (iii)
payment of the Payoff Shares in full satisfaction of the Company Note, the
consideration being received by Fox Health in exchange for the consideration
being transferred by Fox Health in the aggregate is fair from a financial point
of view to Fox Health.
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Fox Health shall be solely responsible for all of the costs and expenses
relating to the preparation and delivery of the Fairness Opinion/Gordian. The
Fairness Opinion/Gordian shall be in substantially the same form as Exhibit A-1
hereto; provided, however, that it shall be subject to change due to any
material changes in relevant facts and circumstances prior to the Closing;
provided, further, however, that the opinion rendered by Gordian Group L.P. at
Closing shall reach the conclusion stated in the immediately preceding sentence.
2.20."Fox Corp." shall mean FoxMeyer Corporation, a Delaware
corporation and wholly-owned subsidiary of Fox Health.
2.21."Fox Drug" shall mean FoxMeyer Drug Company, a Delaware
corporation and wholly-owned subsidiary of Fox Corp.
2.22."Fox Health's Counsel Opinion" shall mean the legal
opinion of Weil, Gotshal & Xxxxxx, counsel to Fox Health, to be delivered at
Closing in the form of Exhibit B attached hereto.
2.23."Fox Health LLC Interest" shall mean the sixty-nine and
eight-tenths percent (69.8%) limited liability company interest in the Company
owned by Fox Health, including, without limitation, (i) all cash, proceeds,
interests, surplus, issues, profits, payments, distributions and other property
currently on account or at any time received, receivable or otherwise payable or
distributable, after the date hereof, in respect of such limited liability
company interest, and the right to receive, receipt for, use and enjoy all such
items, (ii) all right, title and interest of the owner of such limited liability
company interest in and to all real and personal property of the Company, (iii)
all voting rights associated with such limited liability company interest and
(iv) all other rights, however characterized, now or hereafter held by the
Company attributable to such limited liability company interest.
2.24.[Intentionally Omitted.]
2.25."Haft" shall mean Xxxxxx X. Xxxx and Xxxx X. Xxxx,
tenants by the entirety and members of the Company.
2.26."Indemnification Agreement" shall mean that certain
Indemnification Agreement to be executed by Fox Health for the benefit of the
Company and Haft in the form of Exhibit C attached hereto.
2.27."X. Xxxx" shall mean Xxxxx X. Xxxx, a member of the
Board of Directors of Phar-Mor appointed by Haft under the Operating Agreement.
2.28."Insolvent" has the meaning ascribed to it in 11 U.S.C.
ss. 101(32) or under any applicable state insolvency statute.
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2.29."Joint Proxy" shall mean that certain Joint Irrevocable
Proxy dated May 5, 1995, by and among X. Xxxx, Xxx Health, Fox Corp. and the
Company.
2.30."Joint Proxy Termination Agreement" shall mean that
certain Joint Proxy Termination Agreement to be executed by and among X. Xxxx,
the Company and Fox Health, in the form of Exhibit D attached hereto.
2.31."Member Consent" shall mean the irrevocable written
consent of Haft and Fox Health to be executed as of the date hereof authorizing
X. Xxxx, as President of the Company, to enter into the Transaction Documents
and consummate the transactions contemplated thereunder.
2.32."Operating Agreement" shall mean that certain Amended
and Restated Limited Liability Company Agreement of Xxxxxx Xxxx Group/Phar-Mor
L.L.C. (now Xxxxxxxx Xxxxxx L.L.C.) dated May 5, 1995 between Fox Health and
Haft.
2.33."Operating Agreement Amendment" shall mean the amendment
to the Operating Agreement, in the form of Exhibit E attached hereto.
2.34."Payoff Shares" shall mean a number of shares of common
stock, $0.01 par value per share, of Phar-Mor calculated by dividing (a) Three
Million Dollars ($3,000,000) by (b) the closing trading price per share of
Phar-Mor common stock as reported in The Wall Street Journal for the day that is
five (5) business days prior to Closing (if no trading price is reported, the
closing trading price shall be the average trading price for the last five (5)
business days on which trading occurred. At Closing, the Payoff Shares shall be
paid to Fox Health in complete satisfaction of the Company Note pursuant to
Section 4.3 hereof.
2.35."Phar-Mor" shall mean Phar-Mor, Inc., a Pennsylvania
corporation.
2.36."Proxy Stock" has the meaning ascribed to it in the
Joint Proxy.
2.37."X. Xxxx" shall mean Xxxxxx X. Xxxx, President of the
Company.
2.38."Registration Rights Agreement" shall mean that certain
Phar-Mor, Inc. Registration Rights Agreement dated as of September, 1995 by and
among Phar-Mor, the Company and Fox Drug.
2.39."Registration Rights Assignment" shall mean that certain
Assignment and Assumption Agreement to be executed by the Company and Fox Health
as of Closing, in the form of Exhibit F attached hereto, which Agreement is to
assign to Fox Health all of the Company's contractual rights, if any, with
respect to Phar-Mor.
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2.40."Release" shall mean that certain general Release to be
executed by the Company, R. Haft, Haft, Fox Health, Estrin and Xxxxxx as of
Closing, in the form of Exhibit G attached hereto.
2.41."Stock" shall mean the Company's three million seven
hundred fifty thousand (3,750,000) shares of common stock, $0.01 par value per
share, of Phar-Mor.
2.42."Tolling Agreement" shall mean that certain Tolling
Agreement to be executed by Fox Health, Haft and the Company as of the date
hereof.
2.43."Transaction Documents" shall mean this Agreement, the
Credit Lyonnais Consent and Termination Agreement, the Indemnification
Agreement, the Joint Proxy Termination Agreement, the Member Consent, the
Operating Agreement Amendment, the Registration Rights Assignment, the Release
and the Tolling Agreement.
2.44."Trustee Settlement Agreement" shall mean that certain
Settlement Agreement between Xxxx X. Xxxxx, Xx., as Trustee, and Avatex
Corporation.
3. Exchange of Exchange Shares for Exchange Assets. At Closing, Fox
Health shall transfer good and marketable title to the Exchange Assets to the
Company (and execute an appropriate stock power therefor) and, in return, the
Company shall transfer the Exchange Shares to Fox Health (and execute an
appropriate stock power therefor).
4. Redemption of Company Interests; Consideration; Pay Off of
Company Note.
4.1. At Closing, Fox Health shall withdraw from the Company
and transfer and deliver Fox Health's entire legal and beneficial right, title
and interest in and to the Company Interests to the Company, free and clear of
any lien, pledge, claim, option unrecorded or unfiled agreement, contract,
charge, encumbrance, security interest, assessment, limitation and restriction
of any nature whatsoever and the Company shall redeem the Company Interests and
accept such transfer and delivery of the entire legal and beneficial right,
title and interest in and to the Company Interests.
4.2. As consideration for the redemption of the Company
Interests, the Company shall distribute the Distributed Shares to Fox Health and
execute an appropriate stock power therefor.
4.3. At Closing, in full payment and satisfaction of the
Company Note the Company shall deliver the Payoff Shares to Fox Health and
execute an appropriate stock power therefor. At Closing, Fox Health shall xxxx
the original Company Note "Paid in Full" and deliver it to the Company (or
execute and deliver a lost note affidavit and indemnity in form and content
satisfactory to Haft in his reasonable discretion).
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5. Representations and Warranties.
5.1. Fox Health represents and warrants to the Company that, as of
the date hereof, and as of Closing, each of the following representations and
warranties is, and shall be, true, complete and correct:
5.1.1 Except for the Credit Lyonnais-Fox Pledge, Fox
Health has good and marketable title to the Company Interests, free and clear of
any lien, pledge, claim, option, unrecorded or unfiled agreement, contract,
charge, encumbrance, security interest, assessment, limitation or restriction of
any nature whatsoever and Fox Health has not taken or failed to take any action
and shall not take or fail to take any action which, with respect to the Company
Interests, has created or resulted, or could create or result, in any lien,
pledge, claim, option, unrecorded or unfiled agreement, contract, charge,
encumbrance, security interest, assessment, limitation or restriction of any
nature whatsoever.
5.1.2 Subject to the receipt of the Delaware Court
Order and subject to Credit Lyonnais's execution of the Credit Lyonnais Consent
and Termination Agreement, Fox Health has the full power, right, authority and
legal capacity to enter into, execute and deliver the Transaction Documents to
be executed and delivered by Fox Health and to perform all of Fox Health's
obligations under such Transaction Documents.
5.1.3 The Transaction Documents to be executed and
delivered by Fox Health are and shall be duly executed and delivered by Fox
Health and are and shall be the valid and binding obligations of Fox Health,
enforceable in accordance with their respective terms.
5.1.4 Fox Health is not the debtor in any bankruptcy
or insolvency proceeding, nor, based upon its review of its most recent
financial statements and other relevant information, is it Insolvent, nor will
the performance of any actual or potential obligations under this Agreement or
any of the other Transaction Documents executed pursuant to this Agreement
render Fox Health Insolvent.
5.1.5 Fox Health has good and marketable title to
te Company Note and has not transferred, assigned or otherwise conveyed any
interest therein to any other party.
5.1.6
X. Xxx Health is acquiring the Distributed
Shares, the Payoff Shares and the Exchange Shares (collectively, the
"Securities") solely for its own account as an investment and not with a view to
any distribution or resale thereof within the meanings of such terms under the
Securities Act of 1933, as amended (the "Securities Act"). Fox Health has been
advised that the transfer of the Securities hereunder has not been, and will not
be,
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registered under the Securities Act or under the provisions of any state
securities or "blue sky" law.
X. Xxx Health is an "Accredited Investor"
(as such term is defined in Rule 501 of Regulation D of the Securities Act). The
knowledge and experience of Fox Health in financial and business matters is such
that it is capable of evaluating the risk of the investment in the Securities.
Fox Health acknowledges that it has had access to such financial and other
information, and has been afforded the opportunity to ask such question of
representatives of the Company and receive answers thereto, as Fox Health has
deemed necessary in connection with its decision to enter into the transactions
involving the Securities, and that no representation or warranties, express or
implied, are being made by the Company with respect to the Securities, other
than those expressly set forth herein.
5.2. The Company represents and warrants to Fox Health
that, as of the date hereof, and as of Closing, each of the following
representations and warranties is true, complete and correct:
5.2.1 The Company is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
5.2.2 Upon execution of the Member Consent (and
subject to Credit Lyonnais's execution of the Credit Lyonnais Consent and
Termination Agreement), the Company has the full power, right authority and
legal capacity to enter into, execute and deliver the Transaction Documents to
be executed and delivered by the Company and to perform all of the Company's
obligations under such Transaction Documents, and all actions required to
authorize the transactions contemplated by such Transaction Documents and the
execution and delivery by the Company of such Company Interests Documents have
been duly performed and obtained.
5.2.3 The Transaction Documents to be executed and
delivered by the Company have been duly executed and delivered on behalf of the
Company and are the valid and binding obligations of the Company, enforceable in
accordance with their respective terms.
5.2.4 Except for the Credit Lyonnais Company Pledge,
the Company has good and marketable title to the Stock free and clear of any
lien, pledge, claim, option, unrecorded or unfiled agreement, contract, charge,
encumbrance, security interest, assessment, limitation or restriction of any
nature whatsoever and the Company has not taken or failed to take any actin and
shall not take or fail to take any actin which, with respect to the Stock, has
created or resulted, or could create or result, in any lien, pledge, claim,
option, unrecorded or unfiled agreement, contract, charge, encumbrance, security
interest, assessment, limitation or restriction of any nature whatsoever, and
has not transferred, assigned or otherwise conveyed any interest therein to any
other party.
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6. Fox Health Covenants and Agreements. Fox Health covenants and agrees
as follows:
6.1. Fox Health shall use its best efforts to cause Credit
Lyonnais to execute and deliver at Closing the Credit Lyonnais Consent and
Termination Agreement.
6.2. Fox Health shall execute and deliver at Closing the
Operating Agreement Amendment.
6.3. Fox Health shall deliver at Closing the original Company
Note, or an appropriate affidavit of loss and indemnification agreement in form
and content satisfactory to Haft in his reasonable discretion.
6.4. Fox Health shall execute and deliver the Member Consent
as of the date hereof.
6.5. Fox Health shall fully and completely satisfy its
obligations under Section 2 of the Trustee Settlement Agreement.
6.6. Fox Health shall promptly use its best efforts to seek
and obtain prior to Closing the Delaware Court Order.
6.7. Fox Health shall use its best efforts to cause its
counsel to prepare and deliver at Closing the Fox Health's Counsel Opinion.
6.8. At Closing, Fox Health shall execute and deliver the
Release.
6.9. In accordance with the requirements of this Agreement,
Fox Health shall use its best efforts to obtain and deliver the Fairness
Opinion/Gordian.
6.10. At Closing, Fox Health shall execute and deliver the
Joint Proxy Termination Agreement.
6.11. Fox Health shall execute and deliver at Closing the
Registration Rights Assignment.
6.12. Fox Health shall execute and deliver at Closing the
Indemnification Agreement.
6.13. Fox Health, Estrin and Xxxxxx each acknowledges and
agrees that, for purposes of that certain Employment Agreement between X. Xxxx
and Phar-Mor, Inc. dated September 11, 1995 (the "Employment Agreement"), as of
Closing X. Xxxx will have the legal
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right (but not the obligation) to require Phar-Mor to treat the transactions
contemplated under this Agreement as a "change of control" for purposes of the
Employment Agreement, including, without limitation, paragraph 1.50 thereof.
7. Company Covenants and Agreements. The Company covenants and agrees as
follows:
7.1. The Company shall use its best efforts to cause Haft and
X. Xxxx to execute and deliver at Closing the Release and the Operating
Agreement Amendment.
7.2. The Company shall use its best efforts to cause its
counsel to prepare and deliver at Closing the Company's Counsel Opinion.
7.3. The Company shall execute and deliver at Closing the
Joint Proxy Termination Agreement.
7.4. The Company shall execute and deliver at Closing the
Registration Rights Assignment.
7.5. The Company shall execute and deliver at Closing the
Credit Lyonnais Consent and Termination Agreement.
7.6. The Company shall use its best efforts to obtain the
Fairness Opinion/FBR.
7.7. The Company shall execute and deliver at Closing the
Release.
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8. Other Covenants and Agreements.
8.1. X. Xxxx and Haft shall execute and deliver the Release
and the Operating Agreement Amendment at Closing.
8.2. X. Xxxx shall cause X. Xxxx to resign as a member of the
board of directors of Phar-Mor on or prior to Closing.
8.3. At or prior to Closing, X. Xxxx shall resign as a member
of the board of directors of Phar-Mor, provided that he is legally entitled to
the benefits of the written severance agreement contemplated by Section 10.1.11.
8.4. X. Xxxx shall execute and deliver the Proxy Termination
Agreement at Closing.
9. Closing.
9.1. Closing under this Agreement shall occur as soon as
practicable and, in any event, within thirty (30) days of the date of this
Agreement at Xxxxxx, Flyer & Xxxxx, 0000 X Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx,
X.X. 00000.
9.2. X. Xxxx shall have the right, exercisable in his sole
discretion, to terminate this Agreement if the Delaware Court Order is not
issued within thirty (30) days after the date of this Agreement.
10. Conditions Precedent.
10.1. The Company's and Haft's obligations to close under this
Agreement shall be subject to the following conditions precedent (any of which
may be waived, in whole or in part, by the Company and/or Haft in its or their
sole discretion):
10.1.1 Fox Health shall have transferred good and
marketable title to the Exchange Assets to the Company.
10.1.2 Credit Lyonnais shall have executed and
delivered the Credit Lyonnais Consent and Termination Agreement, in form and
content acceptable to the Company and its counsel in their reasonable
discretion.
10.1.3 Fox Health shall have executed and delivered
to the Company the Operating Agreement Amendment.
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10.1.4 Fox Health shall have delivered to the Company
the original Company Note or an appropriate affidavit of loss and
indemnification agreement (in form and content satisfactory to Haft in his
reasonable discretion).
10.1.5 Fox Health shall have executed and delivered
to the Company the Release.
10.1.6 Fox Health's counsel shall have delivered to
the Company the Fox Health's Counsel Opinion.
10.1.7 As of Closing, there shall be no pending or
threatened action, proceeding, judgment, ruling, order or injunction that
prevents, impairs or impedes, or, if successful, reasonably could be expected to
prevent, impair or impede, the consummation of the transactions contemplated
hereby.
10.1.8 Fox Health shall have obtained the Delaware
Court Order.
10.1.9 Fox Health shall have executed and delivered
to the Company the Joint Proxy Termination Agreement.
10.1.10 Fox Health shall have executed and delivered
the Registration Rights Assignment.
10.1.11 X. Xxxx shall have entered into a written
severance agreement with Phar-Mor, with respect to the Employment Agreement on
terms and conditions and in form and content acceptable to X. Xxxx, and Phar-Mor
shall have fully performed all of its obligations thereunder for which
performance is due on or before the "Effective Date" (as defined in such
severance agreement).
10.1.12 Fox Health shall have delivered a copy of the
final signed version of the Fairness Opinion/Gordian to the Company in the form
required by this Agreement.
10.1.13 The Company and Haft shall have received the
Fairness Opinion/FBR.
10.1.14 Fox Health shall be in full compliance with
all of its representations, warranties and covenants under the Trustee
Settlement Agreement and the Trustee (as defined under the Trustee Settlement
Agreement) shall not have claimed any default by Fox Health thereunder. Fox
Health shall certify at Closing to the Company and Haft in writing as to such
compliance.
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10.2. Fox Health's obligations to close under this Agreement
shall be subject to the following conditions precedent (any of which may be
waived, in whole or in part, by Fox Health in its sole discretion):
10.2.1 Credit Lyonnais and the Company shall have
executed and delivered the Credit Lyonnais Consent and Termination Agreement, in
form and content acceptable to Fox Health and its counsel in their reasonable
discretion.
10.2.2 The Company and Haft shall have executed and
delivered to Fox Health the Operating Agreement Amendment.
10.2.3 The Company, Haft and X. Xxxx shall have
executed and delivered to Fox Health the Release.
10.2.4 The Company's counsel shall have delivered to
Fox Health the Company's Counsel Opinion.
10.2.5 As of Closing, there shall be no pending or
threatened action, proceeding, judgment, ruling, order or injunction that
prevents, impairs or impedes, or, if successful, reasonably could be expected to
prevent, impair or impede, the consummation of the transactions contemplated
hereby.
10.2.6 The Company and X. Xxxx shall have executed
and delivered to Fox Health at Closing the Joint Proxy Termination Agreement.
10.2.7 The Company shall have executed and delivered
the Registration Rights Assignment.
10.2.8 X. Xxxx and X. Xxxx shall each have resigned
as a member of Phar-Mor's Board of Directors.
10.2.9 Fox Health shall have obtained the Delaware
Court Order and the Fairness Opinion/Gordian.
10.2.10 The Company shall have transferred good and
marketable title to the Payoff Shares, Exchange Shares and Distributed Shares to
Fox Health; provided, however, that certificate(s) for 1,132,500 of the Shares
shall be delivered directly to the "Trustee" or the "Escrow Agent" (as both such
terms are defined under the Trustee Settlement Agreement) as required by the
Trustee Settlement Agreement.
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11. Tolling of Arbitration Proceeding and Suspension of Buy-Sell.
Concurrently with the execution of this Agreement, Fox Health, Haft and the
Company shall enter into the Tolling Agreement and shall submit the Tolling
Agreement to the Arbitrator.
12. Governing Law. This Agreement shall be governed and construed in
accordance with the internal laws of (and not the laws pertaining to conflicts
or choice of law) the State of Delaware.
13. Costs and Expenses. The Company and Fox Health and each of the other
parties shall each bear their respective costs and expenses incurred in
connection with the negotiation and preparation of the Transaction Documents,
including, without limitation, all fees and expenses of agents, representatives,
counsel and accountants.
14. No Third Party Beneficiaries. This Agreement is made for the
benefit of the parties hereto and no third person or entity shall have any
right, claim or interest by virtue of any provision hereof.
15. Binding Effect; No Assignment. This Agreement and all covenants,
agreements, representations and warranties contained herein shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, executors or administrators, personal or legal
representatives and permitted assigns. Neither party hereto may sell, transfer
or assign all or any portion of its rights or obligations hereunder.
16. Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all, of the parties hereto.
17. Severability of Provisions. If any term, provision or condition or
any portion of any term, provision or condition of this Agreement, or the
application of any such term, provision or condition or any portion thereof to
any person or circumstance, shall be held to be invalid or unenforceable by any
court or governmental agency of competent jurisdiction, such invalidity or
unenforceability shall not affect the remainder of such term, provision or
condition, and this Agreement shall survive and be construed as if such invalid
or unenforceable term, provision or condition had not been contained herein, but
only to the extent of such invalidity or unenforceability.
18. Entire Agreement. This Agreement (including the Exhibits hereto)
and the other Transaction Documents contain the entire understandings and
agreements among the parties with respect to the matters covered and the
transactions contemplated hereunder and no other agreement, statement or promise
made by any party hereto or by any employee, officer,
15
agent or attorney of any party hereto which is not contained herein or therein
shall be valid or binding.
19. Drafting. Each party hereto hereby acknowledges that all parties
hereto participated equally in the drafting of this Agreement and that,
accordingly, no court construing this Agreement shall construe this Agreement
more stringently against one party than any other party.
20. Waivers and Amendments. This Agreement and any term, covenant,
agreement or condition contained herein may be amended, superseded, cancelled,
renewed or extended, and the terms hereof may be waived, and consent or approval
hereunder may be given, only by a written instrument signed personally by the
parties hereto or, in the case of a waiver, by the party personally waiving
compliance by a written instrument signed personally by such party and after the
event of any such amendment, waiver or consent, the failure to observe, perform
or discharge any such term, covenant, agreement or condition (whether such
amendment is executed or such waiver or consent is given before or after such
failure shall not be construed as a breach of such term, covenant, agreement or
condition or an event of default. Unless otherwise expressly set forth in such
waiver or consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which given. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, and no waiver on the part of any party of any
such right, power or privilege, nor any single or partial exercise of any such
right, power or privilege, shall preclude any further exercise thereof or the
exercise of any other such right, power or privilege.
21. Notices.
21.1. All notices, requests, demands, consents, approvals and
other communications that may or are required to be served or given hereunder
(collectively, "notices") shall be in writing and shall be delivered personally,
sent by registered or certified mail, return receipt requested, or by reputable
overnight delivery service, addressed as follows:
21.1.1 If to the Company:
Xxxxxxxx Xxxxxx, L.L.C.
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
with a copy to:
16
Xxxxxx, Flyer & Xxxxx
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
ATTN: Xxxxxxx X. Xxxxxxxxxxx, Esquire
21.1.2 If to Xxxxxx X. Xxxx:
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
with a copy to:
Xxxxxx, Flyer & Xxxxx
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
ATTN: Xxxxxxx X. Xxxxxxxxxxx, Esquire
21.1.3 If to Haft:
0000 Xxxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
with a copy to:
Xxxxxx, Flyer & Xxxxx
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
ATTN: Xxxxxxx X. Xxxxxxxxxxx, Esquire
21.1.4 If to Fox Health:
Avatex Corporation
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxx, Esquire
with a copy to:
17
Weil, Gotshal & Xxxxxx
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esquire
21.1.5 If to Xxxxxx:
Xx. Xxxxx Xxxxxx
000 Xxxx Xxxx
Xxx 000
Xxxx Xxxxxxx Xxxxx, Xxx Xxxx 00000
with a copy to:
Weil, Gotshal & Xxxxxx
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esquire
21.1.6 If to Estrin:
Xx. Xxxxxx X. Xxxxxx
Human Service Group, Inc.
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
with a copy to:
Weil, Gotshal & Xxxxxx
000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esquire
21.2. All notices shall be deemed given (i) when received, in
the case of notices given by registered or certified mail, (ii) one business day
after delivery to an overnight delivery service, in the case of notices given by
reputable overnight delivery service, or (iii) upon delivery thereof, in the
case of notices given personally with failure to accept delivery constituting
delivery for this purpose.
22. Survival. All agreements, covenants, representations and
warranties made hereunder or in any other of the Transaction Documents by or on
behalf of the parties hereto shall continue after execution hereof and survive
the date hereof indefinitely.
18
23. Limitation on Remedies. Notwithstanding anything contained in this
Agreement, the sole and exclusive remedy of Fox Health, Xxxxxx and Xxxxxx
against Xxxx X. Xxxx for any breach or default under this Agreement (but not any
of the other Transaction Documents) shall be the remedy of specific performance,
and Fox Health, Xxxxxx and Xxxxxx hereby irrevocably and forever waive any and
all other legal and equitable remedies (including, without limitation, the
remedy of a suit or claim for damages) against Xxxx X. Xxxx for any such breach
or default; provided, however, that X. Xxxx shall be fully liable and
responsible for, and shall pay all damages in respect of, any breach or default
by Xxxx X. Xxxx under this Agreement.
24. Duration. This Agreement shall be a continuing one and shall be
binding upon the parties regardless of how long before or after the date of this
Agreement any of the parties, obligations were or are incurred. This Agreement
may be terminated only by a writing executed personally and delivered by all of
the parties.
25. Tense, Gender. As used herein, the plural shall refer to and
include the singular, and the singular the plural, and the use of any gender
shall include and refer to any other gender.
26. Captions. The captions herein are for reference purposes only and
in no way define or limit the scope or content of this Agreement or in any way
affect its provisions.
27. Press Release; Disclosure. The parties agree that they shall not
issue any press release or statement or otherwise communicate with the media
concerning the terms, conditions or events surrounding the transactions
reflected by or contemplated under the Transaction Documents without the prior
written consent of the other parties hereto; provided, however, that nothing
contained herein shall prevent the parties from making any public disclosure to
the extent necessary to comply with any applicable securities law, rule or
regulation. A copy of the press release that Fox Health shall issue in
connection with these transactions is attached hereto as Exhibit I; it being
understood and agreed that Fox Health may modify such press release to the
extent required for it to comply with applicable securities law reporting
requirements in light of material changes in relevant facts and circumstances
after the date hereof.
28. Dispute Resolution. Effective on and after the Closing, in the
event a controversy or claim arises under or related to this Agreement or any of
the other Transaction Documents and the parties to the dispute do not settle
their dispute, any unresolved claim or controversy shall, at the election of
either party to pursue such controversy or claim, be submitted to binding
arbitration before a single neutral arbitrator, said arbitrator to be an
attorney admitted to practice before the District of Columbia Superior Court
with at least ten (10) years experience in complex commercial transactions (a
"Qualified Arbitrator"). The Qualified Arbitrator shall be selected through the
following procedure: within ten (10) days
19
following a party's notice of its election to arbitrate, each party shall submit
to the other a list of at least five (5) qualified attorneys and the parties
shall proceed in good faith to select a Qualified Arbitrator from such lists. If
the parties are unable to agree upon a Qualified Arbitrator within thirty (30)
days of submission of such lists, then they shall seek appointment of a
Qualified Arbitrator from the Large Complex Case Panel of the American
Arbitration Association. The arbitration shall be conducted within the greater
Washington, D.C. metropolitan area in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association (provided,
however, that discovery shall be governed by the rules of the United States
District Court for the Eastern District of Virginia), and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof; it being the intent of the parties hereto that, if arbitration is
pursued hereunder, any award made pursuant thereto shall be binding upon and
enforceable against the parties hereto. The parties hereto specifically and
expressly desire that any such controversy or claim be resolved in the most
expeditious manner possible, and, accordingly, irrevocably instruct any such
arbitrator to issue a decision and award within ninety (90) days from the date
such arbitration is commenced.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
XXXXXXXX XXXXXX L.L.C., a Delaware
limited liability company
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Xxxxxx X. Xxxx, President
AVATEX CORPORATION (formerly
FoxMeyer Health Corporation),
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Co- Chief Executive Officer
/s/ Xxxxx Xxxxxx
-----------------------------------
XXXXX XXXXXX
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxx
-----------------------------------
XXXXXX X. XXXX, individually
/s/ Xxxxxx X. Xxxx
-----------------------------------
XXXXXX X. XXXX, tenant by
the entirety
21
/s/ Xxxx X. Xxxx
------------------------------------
XXXX X. XXXX, tenant by
the entirety
22
