EXHIBIT 2
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EXECUTION COPY
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
AVATEX CORPORATION
AND
XETAVA CORPORATION
DATED AS OF JUNE 18, 1999
#377352 v10.
TABLE OF CONTENTS
PAGE
Article I THE MERGER........................................................................2
SECTION 1.1 The Merger...............................................................2
SECTION 1.2 Effective Time...........................................................2
SECTION 1.3 Effects of the Merger....................................................3
SECTION 1.4 Certificate of Incorporation.............................................3
SECTION 1.5 By-Laws..................................................................3
SECTION 1.6 Directors................................................................3
SECTION 1.7 Officers.................................................................3
Article II CONVERSION OF SHARES..............................................................3
SECTION 2.1 Conversion of Shares.....................................................3
SECTION 2.2 Alternate Consideration Elections........................................6
SECTION 2.3 Exchange of Shares.......................................................8
SECTION 2.4 Closing of Transfer Books...............................................11
SECTION 2.5 Stock Options...........................................................11
SECTION 2.6 Employment Agreements and Related Arrangements..........................12
SECTION 2.7 Certain Matters Relating to Deferred Contingent Cash
Rights..................................................................12
SECTION 2.8 Dissenting Shares.......................................................15
Article III COVENANTS........................................................................15
SECTION 3.1 Registration Statement; Proxy Statement/Prospectus......................15
SECTION 3.2 Stockholder Approval....................................................16
SECTION 3.3 OTCBB/Other Exchange Listing............................................16
SECTION 3.4 Fees and Expenses.......................................................16
SECTION 3.5 Fairness and Solvency Opinions..........................................16
SECTION 3.6 Organization and Capitalization of Newco................................17
SECTION 3.7 Newco Certificate of Incorporation......................................17
SECTION 3.8 Authorization of Issuance of Merger Consideration.......................17
Article IV CONDITIONS TO THE OBLIGATIONS OF AVATEX AND XETAVA...............................17
SECTION 4.1 Stockholder Approval....................................................17
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TABLE OF CONTENTS
(CONTINUED)
SECTION 4.2 Certain Proceedings.....................................................18
SECTION 4.3 Listing of New Avatex Common Stock......................................18
SECTION 4.4 Registration Statement..................................................18
SECTION 4.5 Blue Sky Laws...........................................................18
SECTION 4.6 Tax Opinion.............................................................18
SECTION 4.7 Fairness and Solvency Opinions..........................................18
SECTION 4.8 Resignations of Certain Directors.......................................18
SECTION 4.9 Settlements of Certain Litigation.......................................18
SECTION 4.10 Stockholders' Agreement; Voting Agreement...............................19
SECTION 4.11 Dissenting Shares.......................................................19
SECTION 4.12 Releases................................................................19
Article V CLOSING..........................................................................19
SECTION 5.1 Time and Place..........................................................19
SECTION 5.2 Filings at the Closing..................................................19
Article VI TERMINATION......................................................................19
SECTION 6.1 Termination.............................................................19
Article VII MISCELLANEOUS....................................................................20
SECTION 7.1 Amendment and Modification..............................................20
SECTION 7.2 Indemnification.........................................................20
SECTION 7.3 Assignment..............................................................21
SECTION 7.4 Governing Law...........................................................21
SECTION 7.5 Counterparts............................................................22
SECTION 7.6 Interpretation; Definitions.............................................22
SECTION 7.7 Entire Agreement........................................................25
EXHIBITS AND SCHEDULES
Exhibit A -- Form of Stockholders' Agreement
Exhibit B -- Form of Voting Agreement
Exhibit C -- Certificate of Merger of Xetava Corporation with and into
Avatex Corporation
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TABLE OF CONTENTS
(CONTINUED)
Exhibit D -- Form of 6.75% Notes Indenture
Exhibit E -- Form of Warrant Agreement
Exhibit F -- Form of Certificate of Incorporation of Avatex Funding, Inc.
Exhibit G -- Form of Closing Releases
Schedule 2.6 -- Employment Agreements, Benefit Plans
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this
"Agreement"), dated as of June 18, 1999, by and between AVATEX CORPORATION, a
Delaware corporation ("Avatex"), and XETAVA CORPORATION, a Delaware corporation
("Xetava"). Avatex and Xetava are sometimes collectively referred to herein as
the "Constituent Corporations".
W I T N E S S E T H:
WHEREAS, the Constituent Corporations have entered into an
Agreement and Plan of Merger, dated as of April 9, 1998 (the "Original Merger
Agreement");
WHEREAS, the Constituent Corporations wish to amend and
restate the Original Merger Agreement in its entirety as hereinafter set forth;
WHEREAS, Avatex has authorized capital stock consisting of (i)
50,000,000 shares of common stock, $5.00 par value per share (the "Old Avatex
Common Stock"), of which 13,806,375 shares are issued and outstanding as of the
date hereof, and (ii) 10,000,000 shares of Preferred Stock, $5.00 par value, of
which (a) 652,273 shares of $5 Cumulative Convertible Preferred Stock (the
"Convertible Preferred Stock"), and (b) 4,312,352 shares of $4.20 Cumulative
Exchangeable Series A Preferred Stock (the "Series A Preferred Stock" and
together with the Old Avatex Common Stock and the Convertible Preferred Stock,
the "Avatex Shares") are issued and outstanding as of the date hereof;
WHEREAS, Xetava is a direct, wholly-owned subsidiary of
Avatex;
WHEREAS, in connection with the consummation of the
transactions contemplated hereby, Avatex will organize Avatex Funding, Inc., a
Delaware corporation, as a direct, wholly-owned subsidiary of Avatex ("Newco");
WHEREAS, the Board of Directors of Avatex and Xetava believe
it is in the best interest of each respective corporation and their respective
stockholders to consummate the merger of Xetava with and into Avatex (the
"Merger") pursuant to the applicable provisions of the General Corporation Law
of the State of Delaware ("DGCL");
WHEREAS, concurrently with the execution of this Agreement and
in order to induce Avatex and Xetava to enter into this Agreement, certain
holders of Avatex Shares have executed and delivered an agreement, substantially
in the form of Exhibit A hereto, pursuant to which, among other things, such
stockholders granted to Avatex their proxy to vote all of the votes entitled to
be cast by such stockholders with respect to the Avatex Shares that they own in
favor of the adoption of this Agreement, and such stockholders have agreed,
among other things, that, in connection with the Merger, they will elect to
receive the Convertible Preferred Stock Alternate Consideration (as defined in
Section 2.1 hereof) and the Series A Preferred Stock Alternate Consideration (as
defined in Section 2.1 hereof), as applicable (the "Stockholders' Agreement");
WHEREAS, concurrently with the execution of this agreement and
in order to induce Avatex and Xetava to enter into this Agreement, certain
holders of Avatex Shares have executed and delivered an agreement, substantially
in the form of Exhibit B hereto, pursuant to which, among other things, such
stockholders have agreed to vote all Avatex Shares that they own in favor of the
adoption of this Agreement (the "Voting Agreement");
WHEREAS, the Board of Directors of Avatex, pursuant to the
applicable provisions of the DGCL, has declared the Merger advisable, has
approved this Agreement, and has recommended adoption of this Agreement by the
stockholders of Avatex entitled to vote thereon;
WHEREAS, the Board of Directors of Xetava, pursuant to the
applicable provisions of the DGCL, has declared the Merger advisable, has
approved this Agreement and has recommended adoption of this Agreement by its
sole stockholder; and
WHEREAS, capitalized and other defined terms used in this
Agreement are defined in Section 7.6 hereof.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants contained herein, the parties hereto agree as follows:
Article I
THE MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the
conditions hereof and in accordance with the DGCL, at the Effective Time (as
defined in Section 1.2 hereof) Xetava shall be merged with and into Avatex in
accordance with the applicable provisions of the DGCL, and the separate
corporate existence of Xetava shall thereupon cease. Following the Merger,
Avatex shall continue as the surviving corporation (hereinafter referred to for
periods from and after the Effective Time as the "Surviving Corporation") under
the laws of the State of Delaware under the name "Avatex Corporation." Unless
the context requires otherwise, any references herein to Avatex with respect to
periods from and after the Effective Time shall be deemed to refer to Avatex as
the Surviving Corporation.
SECTION 1.2 EFFECTIVE TIME. The Merger shall be consummated by
and shall be effective at the time (the "Effective Time") of the filing with the
Secretary of State of the State of Delaware of a certificate of merger
substantially in the form annexed as Exhibit C hereto (the "Certificate of
Merger"), or in such other form as is required by the relevant provisions of the
DGCL, and executed in accordance with the relevant provisions of the DGCL, and
such other documents as may be required by the provisions of the DGCL (which
filings shall be made as soon as practicable following the satisfaction or
waiver of the conditions set forth in Article IV hereof).
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SECTION 1.3 EFFECTS OF THE MERGER. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 1.4 CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of Avatex shall be amended in its entirety to read as set forth in
the Restated Certificate of Incorporation of Avatex attached as Annex A to the
Certificate of Merger, and as so amended, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter duly amended in
accordance with the terms thereof and the DGCL.
SECTION 1.5 BY-LAWS. The By-Laws of Avatex, as in effect
immediately prior to the Effective Time, shall be the By-Laws of the Surviving
Corporation until thereafter amended as provided by the terms thereof and of the
Certificate of Incorporation of the Surviving Corporation and as provided by
applicable law.
SECTION 1.6 DIRECTORS. The directors of Avatex at the
Effective Time shall be the initial directors of the Surviving Corporation and
will hold office from the Effective Time for the duration of their terms of
office and until their respective successors are thereafter duly elected or
appointed and qualified in the manner provided in the Certificate of
Incorporation and By-Laws of the Surviving Corporation, or as otherwise provided
by law.
SECTION 1.7 OFFICERS. The officers of Avatex immediately prior
to the Effective Time shall be the initial officers of the Surviving Corporation
and will hold office from the Effective Time until their respective successors
are thereafter duly elected or appointed and qualified in the manner provided in
the Certificate of Incorporation and By-Laws of the Surviving Corporation, or as
otherwise provided by law.
Article II
CONVERSION OF SHARES
SECTION 2.1 CONVERSION OF SHARES. (a) At the Effective Time,
by virtue of the Merger and without any action on the part of Avatex or Xetava
or their respective stockholders:
(i) Each share of Old Avatex Common Stock issued and
outstanding immediately prior to the Effective Time shall automatically be
converted into one (1) share (the "Common Stock Exchange Ratio") of class A
common stock, par value $0.01 per share (the "New Avatex Common Stock"), of the
Surviving Corporation.
(ii) (A) Each share of Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time (other than Convertible
Preferred Stock Electing Shares (as defined below), which shall be converted as
described in clause (B) below, and other than Dissenting Shares (as defined
below), which shall be converted as described in Section 2.8 below) shall
automatically be converted into 9.134 shares (the "Convertible Preferred
Exchange Ratio") of New Avatex Common Stock, and (B) each share of Convertible
Preferred Stock issued and outstanding with respect to which a Convertible
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Preferred Stock Alternate Consideration Election (as defined below) has been
effectively made and not revoked on or prior to the Election Deadline (as
defined below) pursuant to Section 2.2 below (the "Convertible Preferred Stock
Electing Shares") shall be automatically converted into the right to receive the
Convertible Preferred Stock Alternate Consideration (as defined in subparagraph
(I) below).
(I) For the purposes of this Agreement, the term "Convertible
Preferred Stock Alternate Consideration" shall mean, for each Convertible
Preferred Stock Electing Share, (1) $ 3.7408 in cash, (2) $ 8.340 (rounded to
the nearest whole dollar) principal amount of 6.75% Notes due 2002 of Newco (the
"6.75% Notes"), which 6.75% Notes shall be issued in accordance with and
governed by an Indenture substantially in the form annexed hereto as Exhibit D
(the "6.75% Notes Indenture") and will be guaranteed by the Surviving
Corporation as provided in the 6.75% Notes Indenture, (3) warrants to purchase
0.67456 shares (rounded to the nearest whole share) of New Avatex Common Stock
exercisable on or after the day that is the three-month anniversary of the
Closing Date (except as otherwise set forth in the Warrant Agreement (as defined
below)) and until the day that is the five-year and three-month anniversary of
the Closing Date at a price per share equal to $2.25, which warrants shall be
issued pursuant to a Warrant Agreement substantially in the form annexed hereto
as Exhibit E (the "Warrant Agreement"), and (4) a deferred contingent cash right
(rounded to the nearest whole number) (a "Convertible Preferred Deferred
Contingent Cash Right") equal to 16% of the Net Recovery Participation Cap (as
defined in subparagraph (II) below) divided by the total number of shares of
Convertible Preferred Stock outstanding immediately prior to the Effective Time.
(II) For the purposes of this Agreement, the term "Net
Recovery Participation Cap" shall mean an amount equal to 20% of the Net
Recovery (as defined below), provided that the Net Recovery Participation Cap
shall in no event exceed $7.5 million; and the term "Net Recovery" shall mean
the amount obtained from the following equation: (1) all of the cash payments,
if any, actually received by the Surviving Corporation in respect of a final,
non-appealable judgment in, a voluntary dismissal with prejudice of, or any and
all final settlements of, all claims, counterclaims, third-party claims and
other claims asserted in or with respect to the lawsuit styled FoxMeyer Health
Corporation x. XxXxxxxx Corporation, et al., Case No. 9700311, filed by Avatex
on January 10, 1997, in the 95th Judicial District Court of Dallas County, Texas
(the "McKesson Litigation") (any and all such cash payments are hereinafter
referred to collectively (if applicable) as, the "Cash Payment"); minus (2) the
sum of the following: (x) the aggregate out-of-pocket expenses incurred
previously and hereafter by Avatex in prosecuting the McKesson Litigation and
obtaining any such Cash Payment (including, but not limited to, any contingent
fee payable to any attorney); (y) any payments, offsets or settlements made by
the Surviving Corporation on or with respect to any counterclaims, third-party
4
claims and other claims in connection with or with respect to the McKesson
Litigation; and (z) an amount (the "Actual Tax Amount") equal to any portion of
the Cash Payment includible in income by the Surviving Corporation for federal
Income Tax (as defined below) purposes multiplied by the effective Income Tax
rate applicable to the Surviving Corporation for the taxable year in which the
obligation to pay the Cash Payment to the Surviving Corporation becomes fixed
(determined taking into account federal, state and local taxes and all
deductions and credits claimed by the Surviving Corporation with respect to such
taxable year, and with appropriate adjustments, including, but not limited to,
as to the applicable tax rate, to account for any actual or imputed interest in
respect of the Cash Payment). The Actual Tax Amount shall be determined by the
Surviving Corporation's independent accountants in good faith and such
determination shall be final and binding on all parties. For the purposes of
this Agreement, the term "Income Tax" shall mean any tax on or measured by
income or gross receipts.
(iii) (A) Each share of Series A Preferred Stock issued and
outstanding immediately prior to the Effective Time (other than Series A
Preferred Stock Electing Shares (as defined below, which shall be converted as
described in clause (B) below, and other than Dissenting Shares, which shall be
converted as described in Section 2.8 below) shall automatically be converted
into 7.253 shares (the "Series A Preferred Exchange Ratio") of New Avatex Common
Stock, and (B) each share of Series A Preferred Stock issued and outstanding
with respect to which a Series A Preferred Stock Alternate Consideration
Election (as defined below) has been effectively made and not revoked on or
prior to the Election Deadline pursuant to Section 2.2 below (the "Series A
Preferred Stock Electing Shares") shall be automatically converted into the
right to receive the Series A Preferred Stock Alternate Consideration (as
defined in subparagraph (I) below).
(I) For the purposes of this Agreement, the term "Series A
Preferred Stock Alternate Consideration" shall mean, for each Series A Preferred
Stock Electing Share, (1) $ 2.9705 in cash, (2) $ 6.623 (rounded to the nearest
whole dollar) principal amount of 6.75% Notes, which 6.75% Notes shall be issued
in accordance with and governed by the 6.75% Notes Indenture and will be
guaranteed by the Surviving Corporation as provided in the 6.75% Notes
Indenture, (3) warrants to purchase 0.53567 shares (rounded to the nearest whole
share) of New Avatex Common Stock exercisable on or after the day that is the
three-month anniversary of the Closing Date (except otherwise set forth in the
Warrant Agreement) and until the day that is the five-year and three-month
anniversary of the Closing Date at a price per share equal to $2.25, which
warrants shall be issued pursuant to the Warrant Agreement, and (4) a deferred
contingent cash right (rounded to the nearest whole number) (a "Series A
Preferred Deferred Contingent Cash Right") equal to 84% of the Net Recovery
Participation Cap divided by the total number of shares of Series A Preferred
Stock outstanding immediately prior to the Effective Time.
(iv) The Series A Preferred Contingent Cash Rights and the
Convertible Preferred Contingent Cash Rights are hereinafter referred to,
collectively, as the "Deferred Contingent Cash Rights". The shares of New Avatex
5
Common Stock, the Convertible Preferred Stock Alternate Consideration and/or the
Series A Preferred Stock Alternate Consideration to be received in the Merger
are sometimes hereinafter referred to, collectively, as the "Merger
Consideration."
(v) Notwithstanding the foregoing, each share of Old Avatex
Common Stock, each share of Convertible Preferred Stock and each share of Series
A Preferred Stock that immediately prior to the Effective Time is held in the
treasury of Avatex shall be cancelled by virtue of the Merger without any
payment of any consideration therefor and shall cease to exist, and no shares of
New Avatex Common Stock or other consideration shall be delivered in exchange
for such shares.
(vi) Each share of common stock, $0.01 par value per share, of
Xetava issued and outstanding immediately prior to the Effective Time shall
automatically be cancelled by virtue of the Merger without any payment of any
consideration therefor and shall cease to exist.
(b) Between the date hereof and immediately prior to the
Effective Time, (i) the outstanding shares of Old Avatex Common Stock,
Convertible Preferred Stock or Series A Preferred Stock shall not be changed
into a different number of shares by reason of any reclassification, split-up,
combination or exchange of shares, and (ii) no dividend payable in stock or
other securities shall be declared thereon with a record date within such
period.
SECTION 2.2 ALTERNATE CONSIDERATION ELECTIONS. (a) Each person
who, on or prior to the Election Deadline (as defined in Section 2.2(c) below),
is a record holder of shares of Convertible Preferred Stock shall be entitled to
make an unconditional election (the "Convertible Preferred Stock Alternate
Consideration Election") with respect to any or all of such person's shares of
Convertible Preferred Stock (such shares thereby becoming Convertible Preferred
Stock Electing Shares, subject to the provisions of this Section 2.2) on or
prior to the Election Deadline to receive, for each Convertible Preferred Stock
Electing Share of such person, Convertible Preferred Stock Alternate
Consideration.
(b) Each person who, on or prior to the Election Deadline, is
a record holder of shares of Series A Preferred Stock shall be entitled to make
an unconditional election (the "Series A Preferred Stock Alternate Consideration
Election") with respect to any or all of such person's shares of Series A
Preferred Stock (such shares thereby becoming Series A Preferred Stock Electing
Shares, subject to the provisions of this Section 2.2) on or prior to the
Election Deadline to receive, for each Series A Preferred Stock Electing Share
of such person, Series A Preferred Stock Alternate Consideration.
(c) Avatex shall prepare and mail a form of election (the
"Form of Election") and a letter of transmittal (which shall specify that
delivery of the certificates representing shares of Convertible Preferred Stock
or Series A Preferred Stock shall be effected, and risk of loss and title to
such certificates shall pass only upon proper delivery of such certificates to
the Exchange Agent, and shall contain or request any information that Avatex may
reasonably require) with the Proxy Statement (as defined in Section 3.1 below)
to the record holders of Convertible Preferred Stock and Series A Preferred
Stock as of the record date (the "Record Date") for the Stockholders' Meeting
(defined in Section 3.2(a) below), which Form of Election shall be used by each
record holder of shares of Convertible Preferred Stock or Series A Preferred
Stock who wishes to make a Convertible Preferred Stock Alternate Consideration
6
Election or a Series A Preferred Stock Alternate Consideration Election, as
applicable, and shall contain therein the acknowledgment and agreement referred
to in Section 2.7(e) below and may request any other information that Avatex may
reasonably require. Avatex will use reasonable best efforts to make the Form of
Election, a letter of transmittal and the Proxy Statement available to all
persons who become record holders of Convertible Preferred Stock or Series A
Preferred Stock during the period between the Record Date and the Election
Deadline. Any election by any such record holder of Convertible Preferred Stock
or Series A Preferred Stock to receive Convertible Preferred Stock Alternate
Consideration or Series A Preferred Stock Alternate Consideration, respectively,
shall have been properly made only if such record holder has affirmatively made
an election on the Form of Election to receive the Convertible Preferred Stock
Alternate Consideration or the Series A Preferred Stock Alternate Consideration,
as the case may be, and the Exchange Agent (as defined in Section 2.3 below)
shall have received at its designated office, by 5:00 p.m., New York City time,
on the second business day next preceding the date of the Stockholders' Meeting
(or such other time and date as Avatex shall determine, including, but not
limited to, as a result of any adjournment or postponement of the Stockholders'
Meeting, the "Election Deadline"), a Form of Election properly completed and
signed and accompanied by the stock certificates representing the Convertible
Preferred Stock Electing Shares or the Series A Preferred Stock Electing Shares,
as the case may be, to which such Form of Election relates, and a duly executed
letter of transmittal. Holders of record of shares of Convertible Preferred
Stock or Series A Preferred Stock who hold such shares as nominees, trustees or
in other representative capacities (a "Representative") may submit multiple
Forms of Election, provided that such Representative certifies that each such
Form of Election covers all of the shares of Convertible Preferred Stock or
Series A Preferred Stock held by each Representative for a particular beneficial
owner.
(d) Any Form of Election submitted to the Exchange Agent may
be revoked or changed by the stockholder submitting it to the Exchange Agent
only by written notice in form and substance reasonably satisfactory to the
Exchange Agent, or by a revised, duly executed, Form of Election received by the
Exchange Agent (i) prior to the Election Deadline or (ii) after the date of the
Proxy Statement, if (and to the extent that) the Exchange Agent is legally
required to permit revocations and the Effective Time of the Merger shall not
have occurred prior to such date. In addition, all Forms of Election shall
automatically be revoked if the Exchange Agent is notified in writing by Avatex
that the Merger has been abandoned. If a Form of Election is revoked, the
certificate or certificates representing the Convertible Preferred Stock
Electing Share or the Series A Preferred Stock Electing Shares to which such
Form of Election relates shall be promptly returned to the stockholder
submitting the same to the Exchange Agent.
(e) The good faith determination of Avatex as to whether or
not a Convertible Preferred Stock Alternate Consideration Election or a Series A
Preferred Stock Alternate Consideration Election has been properly made or
revoked pursuant to this Section 2.2 with respect to Convertible Preferred Stock
Electing Shares or Series A Preferred Stock Electing Shares and when elections
and/or revocations were received by it shall be binding. If Avatex determines in
7
good faith that any Convertible Preferred Stock Alternate Consideration Election
or Series A Preferred Stock Alternate Consideration Election was not properly
made with respect to shares of Convertible Preferred Stock or Series A Preferred
Stock, as the case may be, such shares shall be treated by the Exchange Agent as
shares which were not Convertible Preferred Stock Electing Shares or Series A
Preferred Stock Electing Shares, as the case may be, at the Election Deadline,
and such shares will be automatically converted into shares of New Avatex Common
Stock in accordance with, and pursuant to, clause (A) of Section 2.1(a)(ii) or
clause (A) of Section 2.1(a)(iii), as applicable. The Exchange Agent may, with
the agreement of Avatex, make such rules as are consistent with this Section 2.2
for the implementation of the elections provided for herein as shall be
necessary or desirable fully to effect such elections. Avatex, in its sole
discretion, may, but in no circumstance will be obligated to, accept any Form of
Election received by it or the Exchange Agent after the Election Deadline.
SECTION 2.3 EXCHANGE OF SHARES. (a) Prior to the mailing to
the record holders of capital stock of Avatex entitled to vote at the
Stockholders' Meeting, Avatex shall designate a bank or trust company to act as
exchange agent (the "Exchange Agent") in connection with the Merger. Promptly
following the Effective Time, Avatex shall take all steps necessary to enable
and cause the Exchange Agent to deliver the applicable Merger Consideration as
and when certificates for Avatex Shares are properly surrendered in accordance
with this Section 2.3 and the provisions of the letter of transmittal referred
to in Section 2.3(b) below. Notwithstanding anything herein to the contrary, New
Avatex Common Stock into which Avatex Shares shall be converted in the Merger,
or the Convertible Preferred Stock Alternate Consideration or Series A Preferred
Stock Alternate Consideration into which Convertible Preferred Stock Electing
Shares or Series A Preferred Stock Electing Shares shall be converted in the
Merger, shall be deemed to have been received, issued and/or paid as of the
Effective Time. No dividends, payments or other distributions with a record or
other applicable determination or payment date after the Effective Time with
respect to shares of New Avatex Common Stock, or, if applicable, 6.75% Notes or
Deferred Contingent Cash Rights, shall be paid to the holder of any
unsurrendered stock certificate previously representing Avatex Shares (in any
such case, a "Certificate") with respect to which shares of New Avatex Common
Stock, or, if applicable, Convertible Preferred Stock Alternate Consideration or
Series A Preferred Stock Alternate Consideration, shall be issuable in the
Merger until such Certificate shall be surrendered for exchange as provided
herein, but (i) upon such surrender there shall be paid, without interest, to
the person in whose name the Certificates representing such shares of New Avatex
Common Stock, or, if applicable, 6.75% Notes or Deferred Contingent Cash Rights,
shall be issued the amount of dividends, payments or other distributions
theretofore paid with respect to such shares of New Avatex Common Stock, or, if
applicable, 6.75% Notes or Deferred Contingent Cash Rights, as of any record or
other applicable determination or payment date subsequent to the Effective Time
(but prior to such surrender) and the amount of any cash payable to such person
in lieu of fractional shares of New Avatex Common Stock, pursuant to this
Section 2.3, and (ii) at the appropriate payment date or as soon as practicable
thereafter, there shall be paid to such person the amount of dividends, payments
or other distributions with a record or other applicable determination date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such shares of New Avatex
8
Common Stock, or, if applicable, 6.75% Notes or Deferred Contingent Cash Rights,
subject in any case to any applicable abandoned property, escheat or similar
laws.
(b) Promptly after the Effective Time, Avatex shall cause the
Exchange Agent to mail to each former record holder of Avatex Shares (other than
holders of Convertible Preferred Stock Electing Shares and Series A Preferred
Stock Electing Shares), a form of letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass only upon proper delivery of the Certificates to the Exchange Agent,
and shall contain or request any information that Avatex may reasonably require)
and instructions for use in effecting the surrender of the Certificates.
(c) Upon surrender to the Exchange Agent of a Certificate,
together with such letter of transmittal and, if applicable, a Form of Election,
duly executed and completed in accordance with the instructions thereto, and
such other documents as may be requested, the holder of such Certificate shall,
following the Effective Time, be entitled to receive in exchange therefor the
applicable Merger Consideration deliverable in respect of the Avatex Shares
formerly evidenced by such Certificate or Certificates (together with any cash
in lieu of fractional shares of New Avatex Common Stock, if applicable, pursuant
to Section 2.3(e)) and any other amounts payable pursuant to Section 2.3(a)
hereof, and such Certificate or Certificates shall forthwith be cancelled. Until
surrendered in accordance with the provisions of this Section 2.3, each
Certificate shall represent for all purposes the right to receive the applicable
Merger Consideration and the right to receive cash in lieu of fractional shares
of New Avatex Common Stock, if applicable, and any other amounts payable
pursuant to Section 2.3(a) hereof. If a Certificate or Certificates formerly
evidencing more than one Avatex Share shall be surrendered for exchange as
provided in this Agreement at one time by the same holder, (x) certificates
representing the number of full shares of New Avatex Common Stock, or, in the
case of Convertible Preferred Stock Electing Shares or Series A Preferred Stock
Electing Shares, the amount of Convertible Preferred Stock Alternate
Consideration or Series A Preferred Stock Alternate Consideration, (y) the
amount of cash in lieu of fractional shares of New Avatex Common Stock, if
applicable, and (z) any other amounts payable pursuant to Section 2.3(a) hereof
deliverable upon the surrender thereof shall be computed on the basis of the
aggregate number of Avatex Shares formerly evidenced by such Certificates so
surrendered. Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to a holder of Avatex Shares for any Merger
Consideration or any other consideration payable pursuant to this Article II
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(d) If any stock portion of the applicable Merger
Consideration is to be delivered to a person other than the person in whose name
the Certificate surrendered in exchange thereof is registered, it shall be a
condition to the delivery of such certificates representing stock that the
Certificate so surrendered shall be properly endorsed or accompanied by
appropriate stock powers and otherwise in proper form for transfer, that such
transfer otherwise be proper and that the person requesting such transfer pay to
the Exchange Agent any transfer or other taxes payable by reason of the
9
foregoing or establish to the satisfaction of the Exchange Agent that such taxes
have been paid or are not required to be paid.
(e) Notwithstanding anything herein to the contrary, no
certificates representing fractional shares of New Avatex Common Stock shall be
issued upon the surrender for exchange of Certificates pursuant to this Section
2.3, and no fractional shares of New Avatex Common Stock shall be issued in the
Merger. Such fractional share interests shall not entitle the holder thereof to
vote or to any rights as a security holder of Avatex or the Surviving
Corporation. In lieu of any fractional shares of New Avatex Common Stock, each
person who otherwise would have been entitled to receive any such fractional
shares shall be entitled to receive at the time Merger Consideration is paid
pursuant to this Article II, an amount in cash equal to the product obtained by
multiplying the fractional share interest to which such person would otherwise
be entitled by the average of the last reported sales prices (or the average of
the quoted closing bid and ask prices if there were no sales) of a share of Old
Avatex Common Stock quoted on the OTC Bulletin Board System (the "OTCBB") (or
any other stock exchange, over-the-counter market or trading facility (in any
such case, an "Other Exchange") on which the Old Avatex Common Stock is
primarily listed or admitted for trading) during the 30 consecutive Trading Days
(as defined below) ending on the Trading Day next preceding the Effective Time.
For the purposes of this paragraph, the term "Trading Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday, other than any of such days on
which securities are generally not traded or quoted on the OTCBB or the
applicable Other Exchange.
(f) As soon as practicable after the determination of the
amount of the applicable Merger Consideration to be received, paid and/or issued
to the persons who would otherwise have been entitled to such amounts, without
interest, shall be received, paid and/or issued to such persons; provided,
however, that no such amount will be received, paid and/or issued to any such
person prior to the surrender by such person of the Certificates formerly
representing such person's Avatex Shares. Notwithstanding the foregoing, neither
the Exchange Agent nor any party hereto shall be liable for any cash proceeds
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(g) Promptly following the date that is six months after the
Effective Time, the Exchange Agent shall return to the Surviving Corporation all
certificates, instruments or documents representing or otherwise evidencing the
Merger Consideration issuable pursuant to this Article II in its possession, and
the Exchange Agent's duties shall terminate. Thereafter, each holder of a
Certificate formerly representing an Avatex Share may surrender such Certificate
to the Surviving Corporation and (subject to applicable abandoned property,
escheat or similar laws) receive in exchange therefor Shares of New Avatex
Common Stock issuable pursuant to this Article II, any cash in lieu of
fractional shares, if applicable, pursuant to the terms hereof and any other
amounts payable pursuant to Section 2.3(a) hereof.
(h) Notwithstanding anything to the contrary contained in the
Agreement, in the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
10
such Certificate to be lost, stolen or destroyed, the Surviving Corporation
shall issue (or cause the Exchange Agent to issue) in exchange for such lost,
stolen or destroyed certificate, certificates or other instruments representing
the applicable Merger Consideration, any cash in lieu of fractional shares, if
applicable, and any other amounts payable pursuant to Section 2.3(a) hereof,
deliverable in respect thereof as determined in accordance with this Article II;
provided, however, that the Board of Directors of the Surviving Corporation may,
in its discretion and as a condition precedent to the delivery thereof, require
the owner of such lost, stolen or destroyed Certificate to give the Surviving
Corporation a bond in such sum as it may reasonably direct as indemnity against
any claim that may be made against the Surviving Corporation with respect to the
Certificate alleged to have been lost, stolen or destroyed.
(i) The issuance and/or payment of Merger Consideration in
accordance with the terms of this Article II shall be deemed to have been issued
and/or paid in full satisfaction of all rights pertaining to the Avatex Shares
theretofore represented by such Certificates representing such Avatex Shares.
SECTION 2.4 CLOSING OF TRANSFER BOOKS. After the Effective
Time there shall be no transfers on the stock transfer books of Avatex of the
Avatex Shares that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation, they shall be cancelled and exchanged for certificates or other
instruments representing the applicable Merger Consideration, any cash in lieu
of fractional shares, if applicable, as provided in this Article II and any
other amounts payable pursuant to Section 2.3(a) hereof.
SECTION 2.5 STOCK OPTIONS. At the Effective Time and without
limiting the generality of the matters referred to in Section 1.3, Avatex's
obligations with respect to each outstanding option to purchase shares of Old
Avatex Common Stock (collectively, the "Stock Options") granted pursuant to
Avatex's 1993 Stock Option and Performance Award Plan, as amended (the "Avatex
Option Plan"), or any of Avatex's other stock option plans or agreements (the
"Avatex Stock Option Plans") shall continue to be obligations of the Surviving
Corporation. The Stock Options shall continue to have, and be subject to, the
same terms and conditions set forth in the Avatex Stock Option Plans and
agreements pursuant to which such Stock Options were issued as in effect
immediately prior to the Effective Time, except that the Stock Options shall
thereupon be exercisable for shares of New Avatex Common Stock and (a) the
number of shares for which such Stock Option shall be exercisable shall equal
the product of the Common Stock Exchange Ratio and the number of shares of Old
Avatex Common Stock subject to the Stock Option immediately prior to the
Effective Time (rounded to the nearest whole number), and (b) the per share
exercise price for the shares of New Avatex Common Stock issuable upon the
exercise of such assumed Stock Option shall be equal to the aggregate exercise
price for the shares of Old Avatex Common Stock subject to the Stock Option,
divided by the number of shares of New Avatex Common Stock deemed to be
purchasable pursuant to the Stock Option. The date of grant shall be the date on
which the Stock Option was originally granted. The Surviving Corporation shall
(i) reserve for issuance the number of shares of New Avatex Common Stock that
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will become issuable upon the exercise of such Stock Options pursuant to this
Section 2.5 and (ii) at the Effective Time, execute a document acknowledging the
Surviving Corporation's obligations with respect thereto under this Section 2.5.
Nothing in this Section 2.5 shall affect the schedule of the vesting (or the
acceleration thereof) with respect to the Stock Options, in accordance with the
terms thereof, to be assumed by the Surviving Corporation as provided in this
Section 2.5.
SECTION 2.6 EMPLOYMENT AGREEMENTS AND RELATED ARRANGEMENTS.
(a) At the Effective Date and without limiting the generality of the matters
referred to in Section 1.3 hereof, all of Avatex's rights and obligations under
the employment agreements and other benefit plans and arrangements applicable to
or covering current employees of Avatex listed on Schedule 2.6 hereto shall
continue to be the rights and obligations of the Surviving Corporation.
(b) Without limiting the generality of the matters referred to
in Section 1.3 or 2.6(a) hereof, after the Effective Time, Avatex's Performance
Incentive Plan, effective as of January 1, 1997 (as amended by Amendment No. 1
thereto, effective as of June 23, 1997, and by Amendment No. 2 thereto,
effective as of January 22, 1998, and as the same may be further amended,
supplemented or modified from time to time, the "Incentive Plan"), shall
continue in effect after the Effective Time as a benefit plan of the Surviving
Corporation and the rights and obligations of Avatex thereunder shall continue
after the Effective Time to be the rights and obligations of the Surviving
Corporation in accordance with, and pursuant to, this Section 2.6. For the
purposes of clarification, it is understood that, for the purposes of
determining any amount payable under the Incentive Plan with respect to
Litigation Income (as such term is defined in the Incentive Plan), Litigation
Income shall be calculated in the same manner as Net Recovery is to be
calculated herein, provided that the provisions of Section 2.1 (a)(ii) (II) (z)
hereof shall not be deemed applicable with respect to the definition of
Litigation Income or otherwise with respect to the calculation or payment of any
amounts payable under the Incentive Plan with respect to Litigation Income.
SECTION 2.7 CERTAIN MATTERS RELATING TO DEFERRED CONTINGENT
CASH RIGHTS. (a) No Deferred Contingent Cash Right shall (i) be transferable by
any recipient thereof in connection with the Merger, except by will or pursuant
to the laws of descent and distribution or by operation of law, (ii) be
evidenced by a certificate or other instrument, (iii) possess any voting rights,
(iv) receive or be entitled to receive any dividends or interest, or (v)
represent any equity interest in Avatex, Xetava or the Surviving Corporation.
(b) The Surviving Corporation will maintain (or cause to be
maintained) books of record of the recipients of Deferred Contingent Cash Rights
in the Merger as provided by this Agreement. Such books of record shall show the
names and addresses of the respective recipients of Deferred Contingent Cash
Rights, as the same are made available to Avatex in connection with the
consummation of the Merger.
(c) Notwithstanding anything to the contrary contained herein
or in the Incentive Plan, no provision of the Incentive Plan shall affect or be
deemed to affect any payment on the Deferred Contingent Cash Rights hereunder;
12
provided, however, that if the Surviving Corporation amends the Incentive Plan
in such a manner that accelerates when payments under the Incentive Plan with
respect to Litigation Income may be made, the terms of this Agreement shall be
deemed amended to the extent necessary so that the time at which the Surviving
Corporation becomes obligated to make any payments on the Deferred Contingent
Cash Rights hereunder shall occur concurrently with the time that the Surviving
Corporation first becomes obligated to make payments under the Incentive Plan
with respect to Litigation Income.
(d) (i) Subject to subparagraph (ii) below, payment, if any,
on the Deferred Contingent Cash Rights shall be made to the registered
recipients thereof as of a date that is not later than 30 days following the
date on which the Surviving Corporation receives the full Cash Payment;
provided, however, that, if the Cash Payment is to be received by the Surviving
Corporation in more than one installment, the Surviving Corporation shall make
interim payments on the Deferred Contingent Cash Rights not later than 30 days
following the date on which the Surviving Corporation actually receives any
portion of the full Cash Payment, individually or in the aggregate with other
Cash Payments with respect to which an Interim Payment (as defined below) has
not yet been paid, that would result in the Surviving Corporation being able to
make, in accordance with the applicable provisions of Sections 2.1(a)(ii)(I),
2.1(a)(ii)(II) and 2.1(b)(iii)(I) hereof and this Section 2.7, a payment on the
Deferred Contingent Cash Rights at such time of at least $500,000 (each of any
such payments, an "Interim Payment"). Notwithstanding anything to the contrary
herein and to avoid any confusion herein, under no circumstances will the
Surviving Corporation be obligated to make any payment on the Deferred
Contingent Cash Rights until such time as there has been, with respect to each
and every defendant in the McKesson Litigation, a final, non-appealable
judgment, a voluntary dismissal with prejudice of, or final settlement of all
claims, counterclaims, third-party claims and other claims asserted in or with
respect to the McKesson Litigation.
(ii) Notwithstanding anything to the contrary contained in
this Agreement, for the purposes of calculating an actual payment on the
Deferred Contingent Cash Rights, Avatex shall exclude from the Cash Payment upon
which such payment on the Deferred Contingent Cash Rights is to be based an
amount equal to any portion of such Cash Payment that is includible in income by
the Surviving Corporation for federal Income Tax purposes multiplied by the
highest, combined marginal rate of federal, state and local Income Taxes that is
likely to be applicable to the Surviving Corporation for the taxable year in
which the obligation to pay the Cash Payment to the Surviving Corporation became
fixed (such amount, the "Retained DCCR Payment Amount"), which Retained DCCR
Payment Amount shall be determined by the Surviving Corporation's independent
accountants in good faith and may include appropriate adjustments, including,
but not limited to, to account for any actual or imputed interest that is likely
to be includible in income in respect of the Cash Payment, and such
determination shall be final and binding on all parties. If the Retained DCCR
Payment Amount exceeds the Actual Tax Amount with respect to the Cash Payment
upon which such payment on the Deferred Contingent Cash Rights is based, the
amount of such excess shall be paid pro rata to the registered recipients of
Deferred Contingent Cash Rights (such payment, the "Excess Payout"). The Excess
13
Payout, including interest thereon at a rate of 5% per annum accruing from the
date on which the Surviving Corporation receives the Cash Payment upon which
such payment on the Deferred Contingent Cash Rights is based to the date of the
actual payment of the Excess Payout, shall be made not later than 30 days
following the later of (x) the date on which the Surviving Corporation actually
files all of its federal, state and local Income Tax returns for the taxable
year in which the obligation to pay the Cash Payment to the Surviving
Corporation became fixed, and (y) the date on which the Surviving Corporation
actually receives the Cash Payment upon which such payment on the Deferred
Contingent Cash Rights is based.
(iii) Any payments on the Deferred Contingent Cash Rights
shall be made to the registered recipients of Deferred Contingent Cash Rights at
their respective addresses in the books of record of the Surviving Corporation.
A recipient of a Deferred Contingent Cash Right shall not be entitled to any
interest for the period of time between the date on which the Surviving
Corporation receives any portion of the Cash Payment and the date on which
timely payment is made on the Deferred Contingent Cash Rights in accordance with
the terms hereof; provided, however, that any payments made on the Deferred
Contingent Cash Rights after expiration of the 30-day periods referred to in the
subparagraphs (i) and (ii) above shall include interest thereon at a rate of 8%
per annum accruing from the first day following the expiration of such
applicable 30-day period to the date of the actual applicable payment on
Deferred Contingent Cash Rights in accordance with the terms hereof; provided
further, however, that such interest shall in no event accrue on any portion of
the Retained DCCR Payment Amount until after the expiration of the 30-day
payment period applicable to the payment of the Excess Payout referred to in
subparagraph (ii) above, or on any payment made on the Deferred Contingent Cash
Rights during either such 30-day period so long as such applicable payment was
made to the registered recipient of Deferred Contingent Cash Rights at their
respective addresses in the books and records of the Surviving Corporation.
(e) Notwithstanding anything to the contrary in this Agreement
or otherwise, (i) the Surviving Corporation shall retain sole and exclusive
control of the McKesson Litigation and may, among other things, dismiss, settle
or cease prosecuting all or any portion of the McKesson Litigation at any time,
including, without limitation, without obtaining any cash or other recovery,
(ii) no recipient of Deferred Contingent Cash Rights shall have any rights
against the Surviving Corporation or its directors, officers, agents, attorneys,
representatives, stockholders or affiliates for any decision regarding the
conduct or disposition of the McKesson Litigation, including, without
limitation, any decision to dispose or cease the prosecution of all or any
portion of the McKesson Litigation without a cash recovery by the Surviving
Corporation (except for any claim for violation or breach of Section 2.7(f)
below), and (iii) the Surviving Corporation's good faith determination of the
amounts of the Net Recovery and the Net Recovery Participation Cap will be
final, conclusive and binding on the recipients of Deferred Contingent Cash
Rights. In addition, in the event that any applicable law, rule, regulation or
order limits or prevents the distribution of all or any portion of the Net
Recovery, the Surviving Corporation shall have no obligation whatsoever to make
any payment in excess of the allowable amount, if any. Consequently, should all
14
or any portion of the payments on the Deferred Contingent Cash Rights required
by this Agreement be in excess of the allowable amount at the time such payment
is to be made, the Surviving Corporation will not make all or any portion of the
payment, as the case may be, in excess of the allowable amount at such time or
at any future time. Each record holder of shares of Convertible Preferred Stock
or Series A Preferred Stock electing to receive the Convertible Preferred Stock
Alternate Consideration or the Series A Preferred Stock Alternate Consideration,
as applicable, in accordance with this Agreement will be required to acknowledge
and agree to the foregoing provisions of this Section 2.7(e), and, in connection
therewith, each Form of Election to be signed by such record holders will
contain such acknowledgment and agreement.
(f) Avatex agrees and covenants not to artificially arrange
its affairs so as to avoid or minimize the payment on the Deferred Contingent
Cash Rights (including, without limitation, arranging for some payment of goods
or services, directly or indirectly, from the McKesson Litigation defendants
outside of a settlement thereof).
SECTION 2.8 DISSENTING SHARES. Notwithstanding any other
provision of this Agreement to the contrary, the shares of Convertible Preferred
Stock and Series A Preferred Stock that are outstanding immediately prior to the
Effective Time and which are held by stockholders who shall be entitled to
perfect appraisal rights pursuant to Section 262 of the DGCL and who have fully
complied with all of the requirements of Section 262 of the DGCL for perfecting
appraisal rights (any such shares, the "Dissenting Shares"), shall not be
converted into or represent the right to receive the applicable Merger
Consideration unless such stockholders fail to perfect, withdraw or otherwise
lose their right to appraisal. Such stockholders shall be entitled to receive
payment of the appraised value of such Dissenting Shares in accordance with the
provisions of Section 262 of the DGCL. If, after the Effective Time, any such
stockholder fails to perfect, withdraws or loses its right to appraisal, such
shares of Convertible Preferred Stock and Series A Preferred Stock shall be
treated as if they had been converted as of the Effective Time into a right to
receive the applicable Merger Consideration, without interest thereon, upon
surrender of the Certificate or Certificates that formerly evidenced such shares
of Convertible Preferred Stock or Series A Preferred Stock in the manner set
forth in Section 2.1.
Article III
COVENANTS
SECTION 3.1 REGISTRATION STATEMENT; PROXY
STATEMENT/PROSPECTUS. After the execution of this Agreement, Avatex and Newco
shall prepare and file with the Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "Securities Act"), a
registration statement (the "Registration Statement") with respect to the New
Avatex Common Stock, warrants to purchase shares of New Avatex Common Stock
(including the shares of New Avatex Common Stock issuable upon the exercise of
such warrants) and the 6.75% Notes to be issued in the Merger and shall use all
reasonable efforts to have the Registration Statement declared effective by the
SEC as promptly as practicable. Avatex also shall take any action required to be
taken under state blue sky or securities laws in connection with the issuance of
15
New Avatex Common Stock, warrants to purchase shares of New Avatex Common Stock
(including the shares of New Avatex Common Stock issuable upon the exercise of
such warrants) and the 6.75% Notes pursuant to the Merger, and Avatex, Xetava
and Newco shall furnish all information concerning Avatex, Xetava and Newco and
the holders of Avatex Shares and shall take such other action as may be
reasonably requested by the SEC. Avatex shall maintain the effectiveness of the
Registration Statement as it relates to the warrants to purchase shares of New
Avatex Common Stock (including the shares of New Avatex Common Stock issuable
upon the exercise of such warrants) covered thereunder until the earlier of when
(i) all of such warrants have been exercised or (ii) the exercise period for the
exercise of such warrants under the Warrant Agreement has expired. Avatex shall
prepare for inclusion in the Registration Statement, shall file with the SEC
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on
or before the time the Registration Statement is filed as provided above, and
shall use all reasonable efforts to have cleared by the SEC, a proxy statement
with respect to the meeting of stockholders of Avatex as provided in Section 3.2
below (the "Proxy Statement"), and shall mail the Proxy Statement to such
stockholders as promptly as practicable after clearance of the Proxy Statement
with the SEC. The Proxy Statement shall include the recommendation of the Board
of Directors of Avatex in favor of adoption of this Agreement and the Merger.
SECTION 3.2 STOCKHOLDER APPROVAL. (a) Avatex shall take all
steps necessary to call, give notice of in accordance with the DGCL, convene and
hold a meeting of its stockholders entitled to vote on the Merger (the
"Stockholders' Meeting") as soon as practicable for the purpose of adopting this
Agreement, approving the Merger and for such other purposes as may be necessary
or desirable.
(b) The Board of Directors of Avatex shall recommend to its
stockholders the adoption of this Agreement and shall use its reasonable best
efforts to obtain the necessary approvals by its stockholders of this Agreement
and the transactions contemplated hereby.
SECTION 3.3 OTCBB/OTHER EXCHANGE LISTING. Avatex and Newco
shall use their respective reasonable best efforts to effect, at or before the
Effective Time, approval for quotation or listing on the OTCBB or an Other
Exchange, upon official notice of issuance, of the New Avatex Common Stock,
warrants to purchase shares of New Avatex Common Stock (including the shares of
New Avatex Common Stock issuable upon the exercise of such warrants) and the
6.75% Notes to be issued pursuant to the Merger.
SECTION 3.4 FEES AND EXPENSES. Each party hereto shall pay all
costs and expenses incurred by it in connection with this Agreement and the
transactions contemplated hereby.
SECTION 3.5 FAIRNESS AND SOLVENCY OPINIONS. (a) The Board of
Directors of Avatex shall use its reasonable best efforts to have updated in
form and substance satisfactory to the Board of Directors of Avatex, as of the
time of the mailing of the Proxy Statement and as of the Effective Time, the
opinions of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Financial Advisors, Inc., financial
16
advisor to the Board of Directors of Avatex (the "HL"), that the Board of
Directors of Avatex received to the effect that (i) the consideration that the
holders of the Old Avatex Common Stock are entitled to receive pursuant to the
Merger is fair to such holders from a financial point of view, and (ii) the
consideration that the holders of the Convertible Preferred Stock and the Series
A Preferred Stock are entitled to receive pursuant to the Merger is, in the
aggregate, within a reasonable fair value of the Convertible Preferred Stock or
the Series A Preferred Stock, as applicable (such opinions as of the date hereof
and as so updated, collectively, the "Fairness Opinions").
(b) The Board of Directors of Avatex shall use its reasonable
best efforts to have updated in form and substance satisfactory to the Board of
Directors of Avatex, as of the time of the mailing of the Proxy Statement and as
of the Effective Time, the opinion of HL that the Board of Directors of Avatex
received as to the solvency of the Surviving Corporation after giving effect to
the Merger and the consummation of the other transactions contemplated herein
(such opinion as of the date hereof and as so updated, the "Solvency Opinion").
SECTION 3.6 ORGANIZATION AND CAPITALIZATION OF NEWCO. (a)
Prior to the Effective Time, Avatex will organize Newco as a direct,
wholly-owned subsidiary of Avatex. At all times after such organization and
prior to the transfer of the Phar-Mor Stock (as defined below) contemplated by
this Section 3.6, Newco will have no assets or liabilities of any kind
whatsoever and will not have conducted any business operations of any kind
whatsoever, other than the activities associated with its incorporation, its
authorization of any agreement, document or instrument it is to execute or be
subject to in connection with the consummation of the transactions contemplated
by this Agreement, and its consummation of transactions contemplated by this
Agreement.
(b) On or prior to the tenth business day after the Election
Deadline, Avatex shall, in the form of a contribution to the capital of Newco,
assign, transfer, convey and deliver to Newco, and Newco shall acquire and
accept from Avatex, free and clear of all liens, claims and encumbrances (other
than those created under the 6.75% Notes Indenture and the Pledge and Security
Agreement contemplated thereby) all of Avatex's right, title and interest in and
to 3,571,533 shares of common stock, par value $0.01 per share, of Phar-Mor,
Inc., a Pennsylvania corporation (the "Phar-Mor Stock").
SECTION 3.7 NEWCO CERTIFICATE OF INCORPORATION. Prior to the
Effective Time, Avatex shall cause Newco to file with the Secretary of State of
the State of Delaware the Newco Certificate of Incorporation substantially in
the form annexed hereto as Exhibit F.
SECTION 3.8 AUTHORIZATION OF ISSUANCE OF MERGER CONSIDERATION.
Avatex shall use reasonable efforts to obtain any authorizations and consents
necessary, and shall use reasonable efforts to take such further actions as may
be required, for the payment and/or issuance of the Merger Consideration to
holders of Avatex Shares pursuant to the terms of this Agreement.
17
Article IV
CONDITIONS TO THE OBLIGATIONS OF AVATEX
AND XETAVA
The respective obligations of each party to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Time of the
following conditions:
SECTION 4.1 STOCKHOLDER APPROVAL. This Agreement shall have
been adopted by the affirmative vote of the holders (collectively, the
"Stockholder Approval") of (i) at least a majority of the outstanding shares of
Old Avatex Common Stock, (ii) at least two thirds of the outstanding shares of
Convertible Preferred Stock, and (iii) at least two thirds of the outstanding
shares of Series A Preferred Stock, in each case, voting separately as a class,
at the Stockholders' Meeting or any other meeting of Avatex stockholders, and by
written consent of the sole stockholder of Xetava.
SECTION 4.2 CERTAIN PROCEEDINGS. Neither Avatex nor Xetava
shall be subject to any writ, order, decree or injunction of a court of
competent jurisdiction prohibiting or restricting the consummation of the
Merger.
SECTION 4.3 LISTING OF NEW AVATEX COMMON STOCK. The New Avatex
Common Stock to be issued in the Merger shall have been approved for quotation
or listing on the OTCBB, subject to official notice of issuance, or on an Other
Exchange as so provided for in Section 3.3.
SECTION 4.4 REGISTRATION STATEMENT. The Registration Statement
shall have been declared effective, shall be effective at the Effective Time,
and no stop order suspending such effectiveness or the use of the Proxy
Statement shall have been issued or proceedings for either such purpose shall
have been instituted.
SECTION 4.5 BLUE SKY LAWS. Avatex shall have received all Blue
Sky authorizations necessary to issue the Merger Consideration.
SECTION 4.6 TAX OPINION. Avatex and Xetava shall have received
an opinion of their counsel, Weil, Gotshal & Xxxxxx LLP, to the effect that, for
federal income tax purposes, (i) the Merger will constitute a recapitalization
of Avatex within the meaning of Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"); (ii) no gain or loss will be recognized by Avatex
or Xetava pursuant to the Merger (other than possibly with respect to the
issuance of Deferred Contingent Cash Rights); and (iii) no gain or loss will be
recognized by a holder of Avatex Shares upon the exchange of such shares solely
for shares of New Avatex Common Stock pursuant to the Merger (except with
respect to any cash received in lieu of fractional shares and any New Avatex
Common Stock received by a holder of Series A Preferred Stock or Convertible
Preferred Stock on account of dividend arrearages). In rendering such opinion,
Weil, Gotshal & Xxxxxx LLP may receive and rely upon representations contained
in certificates.
SECTION 4.7 FAIRNESS AND SOLVENCY OPINIONS. The Fairness
Opinions and the Solvency Opinion, including the updates thereof referred to in
Section 3.5 above, shall have been received and shall not have been modified,
18
withdrawn or revoked (i) as of the time of the mailing of the Proxy Statement to
the stockholders of Avatex or (ii) before the Effective Time.
SECTION 4.8 RESIGNATIONS OF CERTAIN DIRECTORS. Each of Messrs.
Xxxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx XxxxxXxxxxx, Xx. and Xxxxx Xxxxxx shall
have delivered a written letter to Avatex providing for the resignation of each
of them as directors of Avatex effective immediately prior to the Effective
Time.
SECTION 4.9 SETTLEMENTS OF CERTAIN LITIGATION. The lawsuits,
filed in April 1998 in the Delaware Chancery Court, styled Harbor Finance
Partners Ltd., et. al. x. Xxxxxx, et al., C.A. No. 16334 and Strougo x. Xxxxxx,
et. al., C.A. No. 16345, each of which lawsuits was consolidated by the Delaware
Chancery Court in May 1998 under the caption In re: Avatex Corporation
Shareholders Litigation, C.A. No. 16334, and Xxxxxxx Associates, L.P. v. Avatex
Corporation, et. al., C.A. No. 16336, shall be settled pursuant to a settlement
agreement with terms and provisions satisfactory to Avatex and such settlement
agreement shall be approved by a court of competent jurisdiction and, in
connection therewith, such litigation shall be dismissed with prejudice, and
such settlement, approval and dismissal shall be final and non-appealable.
SECTION 4.10 STOCKHOLDERS' AGREEMENT; VOTING AGREEMENT.
Neither the Stockholders' Agreement nor the Voting Agreement shall have
terminated or been terminated, and no notice of any such termination shall have
been delivered to Avatex by any stockholder party thereto. There shall not have
been a breach of the Stockholders' Agreement or the Voting Agreement by any of
the stockholders of Avatex party thereto.
SECTION 4.11 DISSENTING SHARES. On the Closing Date, shares of
Convertible Preferred Stock that constitute Dissenting Shares shall aggregate no
more than 5% of the then outstanding shares of Convertible Preferred Stock, or
shares of Series A Preferred Stock that constitute Dissenting Shares shall
aggregate no more than 5% of the then outstanding shares of Series A Preferred
Stock.
SECTION 4.12 RELEASES. Each of the stockholders of Avatex
party to the Stockholders' Agreement or the Voting Agreement, for themselves and
each of their respective affiliates, shall have executed and delivered to Avatex
a written release, substantially in the form of Exhibit G hereto, which release
shall be as of, and effective upon, the effectiveness of the Merger.
Article V
CLOSING
SECTION 5.1 TIME AND PLACE. The closing of the Merger (the
"Closing") shall take place at the offices of Weil, Gotshal & Xxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on a date agreed to by Avatex and Xetava
following satisfaction or waiver by Avatex or Xetava, as the case may be, of the
19
conditions set forth in Article IV. The date on which the Closing actually
occurs is herein referred to as the "Closing Date."
SECTION 5.2 FILINGS AT THE CLOSING. Avatex and Xetava shall
immediately after the Closing (a) file with the Delaware Secretary of State the
Certificate of Merger and (b) take all such other and further actions as may be
required by law to make the Merger effective.
Article VI
TERMINATION
SECTION 6.1 TERMINATION. Avatex may terminate this Agreement
(a) if holders of at least 50.1% of each of the shares of Convertible Preferred
Stock and Series A Preferred Stock outstanding as of immediately prior to the
Election Deadline have not effectively made (and not revoked) prior to the
Election Deadline a Convertible Preferred Stock Alternate Consideration Election
or Series A Preferred Stock Alternate Consideration Election, as the case may
be, pursuant to Section 2.2 hereof, or (b) if shares of Convertible Preferred
Stock that constitute Dissenting Shares shall aggregate more than 5% of the then
outstanding shares of Convertible Preferred Stock or shares of Series A
Preferred Stock that constitute Dissenting Shares shall aggregate more than 5%
of the then outstanding shares of Series A Preferred Stock. In addition, this
Agreement may be terminated at any time prior to the Effective Time, whether
before or after Stockholder Approval, by the Board of Directors of either of
Avatex or Xetava, including, without limitation, because of the non-fulfillment
of any of the conditions set forth in Article IV hereof. In the event of
termination of the Merger pursuant to the foregoing sentences, this Agreement
shall terminate and the Merger shall be abandoned, without further action by any
of the parties hereto.
Article VII
MISCELLANEOUS
SECTION 7.1 AMENDMENT AND MODIFICATION. Subject to applicable
law, this Agreement may be amended, modified or supplemented, before or after
Stockholder Approval, only by written agreement of Avatex and Xetava at any time
prior to the Effective Time with respect to any of the terms contained herein;
provided, however, that, after this Agreement is adopted by Avatex's
stockholders pursuant to Section 3.2, no such amendment or modification shall be
made that by law requires further approval by the stockholders of Avatex
entitled to vote thereon without the further approval of such stockholders.
SECTION 7.2 INDEMNIFICATION. (a) The Surviving Corporation
shall maintain, for a period of at least six years from the Effective Time, (i)
director and officer liability insurance providing at least $30 million of
coverage with respect to Avatex's present and former officers and directors and
other similar coverage as the current policies maintained by or on behalf of
Avatex, and containing terms and conditions which are no less advantageous with
respect to matters existing or occurring at or prior to the Effective Time, and
in the event any claim is made against present or former directors or officers
20
of Avatex that is covered, in whole or in part, or potentially so covered by
insurance, the Surviving Corporation shall not do anything that would forfeit,
jeopardize, restrict or limit the insurance coverage available for that claim
until the final disposition of that claim; provided, however, that if the cost
of maintaining such insurance exceeds twice the current cost related to
providing such insurance (the "Current Cost"), then the Surviving Corporation
shall maintain such director and officer liability insurance with the maximum
amount of coverage obtainable at twice such Current Cost, and (ii) provisions in
its certificate of incorporation and by-laws relating to indemnification,
exculpation and advancement of expenses no less favorable than the rights to
indemnification, exculpation and advancement of expenses now existing in favor
of the present and former directors and officers of Avatex and its subsidiaries
as provided in its certificate of incorporation or by-laws or otherwise in
effect on the date hereof; provided, however, that with respect to any claim
asserted, made or originated prior to the expiration of such six-year period
until the final disposition of such Claim (as hereinafter defined), and that
during such period, the Certificate of Incorporation and By-Laws of the
Surviving Corporation shall not be amended to reduce or limit the rights of
indemnity or advancement of expenses of the present and former directors or
officers of Avatex, or the ability of the Surviving Corporation to indemnify (or
advance expenses to) them, nor to hinder, delay or make more difficult the
exercise of such rights of indemnity or advancement of expenses or the ability
to indemnify or advance expenses.
(b) From and after the Effective Time, the Surviving
Corporation shall indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date of this Agreement or who becomes prior to
the Effective Time, an officer or director of Avatex against all losses, claims,
damages, costs, expenses or liabilities, or in connection with any claim,
action, suit, proceeding or investigation (a "Claim"), arising out of the fact
that such person is or was an officer or director of Avatex (or out of any
action taken by any such person on behalf of Avatex), pertaining to any matter
existing or occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement), whether asserted
or claimed prior to, or at or after, the Effective Time. In each case such
indemnification shall be to the fullest extent that a corporation is permitted
under applicable law to indemnify its own directors and officers, as the case
may be (and the Surviving Corporation will pay expenses in advance of the final
disposition of any such action or proceeding to each such present or former
director or officer of Avatex seeking indemnification hereunder to the full
extent permitted by law).
(c) Without limiting the foregoing, in any case in which
approval by the Surviving Corporation is required to effectuate any
indemnification under this Section 7.2, it shall direct, at the election of the
director or officer of Avatex seeking indemnification hereunder, that the
determination of any such approval shall be made by independent counsel
acceptable to the Surviving Corporation selected by such present or former
director or officer of Avatex seeking indemnification hereunder.
(d) This Section 7.2 shall survive the consummation of the
Merger. The provisions of this Section 7.2 are intended to be for the benefit
of, and shall be enforceable by the present and former directors and officers of
Avatex. The rights provided under this Section 7.2 shall be in addition to, and
21
not in lieu of, any rights to which any party may have under the Certificate of
Incorporation or By-Laws of Avatex or the Surviving Corporation, any other
agreements or otherwise.
SECTION 7.3 ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto without the prior written consent of the
other party, nor is this Agreement intended to confer upon any other person
except the parties hereto any rights or remedies hereunder.
SECTION 7.4 GOVERNING LAW. This Agreement shall be governed by
the laws of the State of Delaware (regardless of the laws that might otherwise
govern under applicable Delaware principles of conflicts of law) as to all
matters, including, but not limited to, matters of validity, construction,
effect, performance and remedies.
SECTION 7.5 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 7.6 INTERPRETATION; DEFINITIONS. (a) The article and
section headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any way
affect the meaning or interpretation of this Agreement. As used in this
Agreement, (i) the term "person" shall mean and include an individual, a
partnership, a limited liability company, a joint venture, a corporation, a
trust, an unincorporated organization and a government or any department or
agency thereof; (ii) the term "subsidiary" of any specified corporation shall
mean any corporation of which the outstanding securities having ordinary voting
power to elect a majority of the board of directors are directly or indirectly
owned by such specified corporation; and (iii) the term "business day" shall
mean any day of the week other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close.
Terms defined herein in the singular shall have a comparable meaning when used
in the plural, and vice versa.
(b) Each of the following terms shall have the respective
meaning ascribed such term in the section of this Agreement set forth opposite
such term below:
Term Section
---- -------
Actual Tax Amount 2.1(a)(ii)(A)(II)
Agreement Introductory Paragraph
Avatex Introductory Paragraph
Avatex Option Plan 2.5
Avatex Shares Recitals
Avatex Stock Option Plans 2.5
22
Cash Payment 2.1(a)(ii)(A)(II)
Certificate 2.3(a)
Certificate of Merger 1.2
Claim 7.2(b)
Closing 5.1
Closing Date 5.1
Code 4.6
Common Stock Exchange Ratio 2.1(a)(i)
Constituent Corporations Introductory Paragraph
Convertible Preferred Deferred
Contingent Cash Right 2.1(a)(ii)(A)(I)
Convertible Preferred Exchange Ratio 2.1(a)(ii)
Convertible Preferred Stock Recitals
Convertible Preferred Stock Alternate
Consideration 2.1(a)(ii)(A)(I)
Convertible Preferred Stock Alternate
Consideration Election 2.2(a)
Convertible Preferred Stock Electing
Shares 2.1(a)(ii)
Current Cost 7.2(a)
Deferred Contingent Cash Rights 2.1(a)(iv)
DGCL Recitals
Dissenting Shares 2.8
Effective Time 1.2
Election Deadline 2.2(c)
Excess Payout 2.7(d)
Exchange Act 3.1
Exchange Agent 2.3(a)
Fairness Opinion 3.5(a)
Form of Election 2.2(c)
HL 3.5(a)
Incentive Plan 2.6(b)
23
Interim Payment 2.7(d)
Income Tax 2.1(a)(ii)(A)(II)
Litigation Income 2.6(b)
McKesson Litigation 2.1(a)(ii)(A)(II)
Merger Recitals
Merger Consideration 2.1(a)(iv)
Net Recovery 2.1(a)(ii)(A)(II)
Net Recovery Participation Cap 2.1(a)(ii)(A)(II)
New Avatex Common Stock 2.1(a)(i)
Newco Recitals
Old Avatex Common Stock Recitals
Original Merger Agreement Recitals
Other Exchange 2.3(e)
OTCBB 2.3(e)
Phar-Mor Stock 3.6(b)
Proxy Statement 3.1
Record Date 2.2(c)
Registration Statement 3.1
Retained DCCR Payment Amount 2.7(d)
Representative 2.2(c)
SEC 3.1
Securities Act 3.1
Series A Preferred Deferred Contingent
Cash Right 2.1(a)(iii)(A)(I)
Series A Preferred Exchange Ratio 2.1(a)(iii)(A)
Series A Preferred Stock Recitals
Series A Preferred Stock Alternate
Consideration 2.1(a)(iii)(A)(I)
Series A Preferred Stock Alternate
Consideration Election 2.2(b)
Series A Preferred Stock Electing
Shares 2.1(a)(iii)(A)
24
6.75% Notes 2.1(a)(ii)(A)(I)
6.75% Notes Indenture 2.1(a)(ii)(A)(I)
Solvency Opinion 3.5(b)
Stock Options 2.5
Stockholder Approval 4.1
Stockholders' Agreement Recitals
Stockholders' Meeting 3.2
Surviving Corporation 1.1
Trading Day 2.3(e)
Voting Agreement Recitals
Warrant Agreement 2.1(a)(ii)(A)(I)
Xetava Introductory Paragraph
SECTION 7.7 ENTIRE AGREEMENT. This Agreement, including the
schedules and exhibits hereto and the documents and instruments referred to
herein, embodies the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no covenants or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and the understandings between the
parties with respect to such subject matter, including the Original Merger
Agreement.
[SIGNATURES ON FOLLOWING PAGE]
25
IN WITNESS WHEREOF, Avatex and Xetava have caused this
Agreement to be signed by their respective duly authorized officers on the date
first above written.
AVATEX CORPORATION
By: /s/ Abbey X. Xxxxxx
---------------------------
Abbey X. Xxxxxx,
Co-Chief Executive Officer
XETAVA CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Xxxxxx X. Xxxxxx,
Co-Chief Executive Officer
26
SCHEDULE 2.6
EMPLOYMENT AGREEMENTS:
----------------------
1. Employment Agreement dated as of February 27, 1995, as amended by the
Amendment thereto effective as of February 1, 1998, with Abbey X.
Xxxxxx.
2. Employment Agreement dated as of November 12, 1996, as amended by the
Amendment thereto effective as of February 1, 1998, with Xxxxx X.
Xxxxxxx.
3. Employment Agreement, dated as of February 27, 1995, as amended by the
Amendment thereto effective as of February 1, 1998, with Xxxxxx X.
Xxxxxx..
4. Employment Agreement dated as of November 7, 1996, as amended by the
Amendment thereto effective as of February 1, 1998, with Xxxxxx X.
Xxxxxxx.
5. Employment Agreement effective as of February 1, 1998, with Xxxx X.
Xxxxxx.
6. Employment Agreement dated as of November 20, 1996, as amended by the
Amendment thereto effective as of February 1, 1998, with Xxxxx X.
Xxxxxxxx.
7. Employment Agreement dated as of November 12, 1996, as amended by the
Amendment thereto effective as of February 1, 1998, with Xxxxx X.
Xxxxxxxx.
8. Employment Agreement dated as of November 12, 1996, as amended by the
Amendment thereto effective as of February 1, 1998, with Xxxxxxx X.
Xxxxx.
9. Employment Agreement dated as of November 12, 1996, as amended by the
Amendment thereto effective as of February 1, 1998, with Xxxxxx X.
Xxxxx.
INDEMNIFICATION AGREEMENTS:
---------------------------
1. Indemnification Agreement dated as of October 23, 1997 with Abbey X.
Xxxxxx.
2. Indemnification Agreement dated as of October 23, 1997 with Xxxxxx X.
Xxxxxx.
3. Indemnification Agreement dated as of October 23, 1997 with Xxxxxx X.
Xxxxxxx.
4. Indemnification Agreement dated as of October 23, 1997 with Xxxx X.
Xxxxxx.
5. Indemnification Agreement dated as of October 23, 1997 with Xxxxx X.
Xxxxxxxx.
6. Indemnification Agreement dated as of October 23, 1997 with Xxxxx X.
Xxxxxxxx.
7. Indemnification Agreement dated as of October 23, 1997 with Xxxxxx X.
Xxxxx.
8. Indemnification Agreement dated as of October 23, 1997 with Xxxxx X.
Xxxxxxx.
9. Indemnification Agreement dated as of October 23, 1997 with Xxxx X.
Xxxx.
#600291 v1.
10. Indemnification Agreement dated as of October 23, 1997 with Xxxxxxx X.
Xxxxx.
11. Indemnification Agreement dated as of October 23, 1997 with Xxxxxxx X.
Xxxxxxx.
12. Indemnification Agreement dated as of October 23, 1997 with Xxxx X.
Xxxxxxxxx.
BENEFIT PLANS:
--------------
1. Performance Incentive Plan, effective as of January 1, 1997, as amended
by Amendment No. 1 thereto, effective as of June 23, 1997, and
Amendment No. 2 thereto, effective as of January 22, 1998.
2. Avatex Corporation Employees' Savings and profit Sharing Plan,
effective as of April 1, 1997.
3. Avatex Corporation Employees' Medical Plan.
4. Avatex Corporation Employees' Dental Plan.
5. Avatex Corporation Employees' Basic and Supplemental Voluntary
Accidental Death and Dismemberment Plan.
6. Avatex Corporation Employees' Long-Term Disability Plan.
7. Avatex Corporation Employees' Short-Term Disability Plan.
8. Avatex Corporation Employees' Vision Plan.
9. Avatex Corporation Employees' Business Travel Accident Plan.
10. Avatex Corporation Employees' Basic and Supplemental Voluntary Life
Insurance Plan.
11. Avatex Corporation Employees'Flexible Benefit Program.
2
EXHIBIT A
FORM OF STOCKHOLDERS' AGREEMENT
(see attached)
A-1
EXHIBIT B
FORM OF VOTING AGREEMENT
(see attached)
B-1
EXHIBIT C
CERTIFICATE OF MERGER
OF
XETAVA CORPORATION
WITH AND INTO
AVATEX CORPORATION
Under Section 251
of
the Delaware General Corporation Law
AVATEX CORPORATION, a Delaware corporation, hereby certifies
that:
FIRST: The name and the state of incorporation of each of the
constituent corporations is as follows:
Name State of Incorporation
---- ----------------------
Avatex Corporation ("Avatex") Delaware
Xetava Corporation ("Xetava") Delaware
SECOND: An Agreement and Plan of Merger, dated as of May __,
1999 (the "Agreement of Merger"), by and between Avatex and Xetava has been
approved, adopted, certified, executed and acknowledged by each of the
constituent corporations named above in accordance with Section 251 (and, with
respect to Xetava, by the written consent of its sole stockholder in accordance
with Section 228) of the General Corporation Law of the State of Delaware.
THIRD: The name of the surviving corporation is Avatex
Corporation (the "Surviving Corporation").
FOURTH: The Certificate of Incorporation of Avatex shall be
amended in its entirety to read as set forth in the Restated Certificate of
Incorporation of Avatex attached hereto as Annex A, and as so amended, shall be
the Certificate of Incorporation of the Surviving Corporation, until duly
amended in accordance with applicable law and the terms thereof.
FIFTH: The executed Agreement of Merger is on file at the
principal place of business of the Surviving Corporation at 0000 X. Xxxxxxx
Xxxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000.
C-1
SIXTH: A copy of the Agreement of Merger will be furnished by
the Surviving Corporation, on request and without cost, to any stockholder of
any constituent corporation.
IN WITNESS WHEREOF, Avatex has caused this certificate to be
executed as of the day of ___________, 1999.
AVATEX CORPORATION
By:
------------------------------
Name:
Title:
C-2
EXHIBIT D
FORM OF 6.75% NOTES INDENTURE
(see attached)
D-1
EXHIBIT E
FORM OF WARRANT AGREEMENT
(see attached)
E-1
EXHIBIT F
FORM OF NEWCO CERTIFICATE OF INCORPORATION
(see attached)
F-1
EXHIBIT G
FORM OF CLOSING RELEASES
(see attached)
G-1
