SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 7, 1999
AVATEX CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-8549 25-1425889
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(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
5910 N. CENTRAL EXPRESSWAY, SUITE #1780 75206
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
214-365-7450
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
Page 1 of 4 Pages
Exhibit Index on Page 4
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Item 2. Acquisition or Disposition of Assets
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Avatex Corporation ("Avatex"), through four of its wholly-owned
subsidiaries, owns interests in three real estate developments as described in
this paragraph. National Intergroup Realty Development, Inc. ("NIRD"), owns a 1%
general partnership interest and 49% limited partnership interest in Millbank
Partners - Mass. Ave. Limited Partnership ("MALP"), which owns and operates a
hotel located in the Thomas Circle area of Washington, D.C. National Intergroup
Realty Funding, Inc. ("NIRF"), owns a 1% general partnership interest and 49%
limited partnership interest in Millbank Partners - Va. Ave. Limited Partnership
("VALP"), which owns and operates a hotel located in northwest Washington, D.C.
In connection with its partnership interests in VALP, NIRF also owns (i) a 50%
tenant in common interest in the land located 2601 Virginia Avenue, N.W. in
Washington, D.C. (the "Land"), and (ii) a ground lessor's interest in the Ground
Lease dated October 5, 1994 (the "Ground Lease") between NIRF, VALP and Bles
South Limited Partnership, both of which relate to the real property on which
the hotel is located. National Intergroup Realty Corporation ("NIRC") owns a 49%
limited partnership interest, and a wholly-owned subsidiary of NIRC, National
Intergroup Realty Riva, Inc. ("NIRR"), owns a 1% general partnership interest,
in Millbank Partners - Riva Limited Partnership ("RVLP"), which owns and
operates a hotel and an adjoining office building located in Annapolis,
Maryland.
On March 8, 1999, Avatex, NIRD, NIRF, NIRC and NIRR (collectively, the
"Companies"), entered into a letter agreement (the "Letter Agreement") with The
Bernstein Companies containing the terms and conditions under which (i) NIRF and
The Bernstein Companies and its affiliates ("Bernstein") will cooperate to
market and sell their interests in VALP, the Land and the Ground Lease
(collectively, the "Property"), and (ii) upon the sale of NIRF's interest in the
Property, Bernstein will purchase NIRD's interests in MALP and NIRC's and NIRR's
interests in RVLP. The Companies' approval of the Letter Agreement was subject
to their receipt of an opinion with respect to the reasonable value of the
Companies' interests that would be sold in the transactions contemplated by the
Letter Agreement, which opinion was received by the Companies on or about March
31, 1999.
The Letter Agreement sets forth the total amount that the Companies will
receive upon the sale of the Property, irrespective of the price actually paid
by a third party for the Property. On May 7, 1999, as contemplated by the Letter
Agreement, VALP, NIRF and BSLP executed an Agreement of Sale to sell the
Property. In accordance with the Letter Agreement, (i) VALP will redeem NIRF's
interest in VALP in exchange for the transfer from VALP to NIRF of all of VALP's
interest in the Property, (ii) NIRF will sell such interests, along with its 50%
interest in the Land and the Ground Lease, to the purchaser under the Agreement
of Sale, and (iii) NIRD will transfer its interests in MALP, and NIRC and NIRR
and will transfer their interests in RVLP, to Bernstein. The Companies expect to
receive a total of approximately $12 million as a result of the consummation of
the transactions contemplated by the Letter Agreement, of which approximately
$11.4 million will be in cash and approximately $600,000 will be in the form of
a one year secured note to be executed by Bernstein. Avatex expects to recognize
an approximate
Page 2 of 4 Pages
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$6 million gain upon the closing of these transactions, which the parties
anticipate will occur on or about May 27, 1999.
The Bernstein Companies is a real estate development firm based in
Washington, D.C. Melvyn J. Estrin, Co-Chairman and the Co-Chief Executive
Officer of each of the Companies, is the brother of Wilma E. Bernstein and the
brother-in-law of Stuart A. Bernstein, owners of The Bernstein Companies. The
Avatex Board of Directors, with Mr. Estrin abstaining, has approved the
transactions contemplated by the Letter Agreement.
Reference is hereby made to the Letter Agreement dated March 8, 1999, and
the Press Release, dated May 12, 1999, issued by Avatex, which are attached
hereto as Exhibits 2 and 99, respectively, and incorporated herein by reference.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
2 Letter Agreement, dated March 8, 1999, among Avatex, National
Intergroup Realty Corporation, National Intergroup Realty
Development, Inc., National Intergroup Realty Funding, Inc.,
National Intergroup Realty Riva, Inc. and The Bernstein Companies.
99 Press Release dated May 12, 1999, issued by Avatex Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVATEX CORPORATION
(Registrant)
By: /s/ Robert H. Stone
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Robert H. Stone
Vice President and
General Counsel
Page 3 of 4 Pages
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EXHIBIT INDEX
Exhibit No. Description
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2 Letter Agreement, dated March 8, 1999, among Avatex, National
Intergroup Realty Corporation, National Intergroup Realty
Development, Inc., National Intergroup Realty Funding, Inc.,
National Intergroup Realty Riva, Inc. and The Bernstein
Companies.
99 Press Release, issued by Avatex Corporation.
Page 4 of 4 Pages
EXHIBIT 2
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<PAGE>
March 8, 1999
Avatex Corporation
National Intergroup Realty Corporation
National Intergroup Realty Development, Inc.
National Intergroup Realty Funding, Inc.
National Intergroup Realty Riva, Inc.
5910 N. Central Expressway, No. 1780
Dallas, Texas 75206
Re: Millbank Partnerships
Gentlemen:
As you are aware, National Intergroup Realty Development, Inc. ("NIRD")
owns a one percent (1%) general partnership interest and a forty-nine percent
(49%) limited partnership interest in Millbank Partners-Mass. Ave. Limited
Partnership ("Millbank MassAve"). In addition, National Intergroup Realty
Funding, Inc. ("NIRF") owns (i) a one percent (1%) general partnership interest
and a forty-nine percent (49%) limited partnership interest in Millbank
Partners-Virginia Avenue Limited Partnership ("Millbank VaAve"), (ii) a fifty
percent (50%) tenant in common interest in the land located at 2601 Virginia
Avenue, N.W., Washington, D.C. (the "VaAve Land") and (iii) a ground lessor's
interest in that certain Ground Lease dated October 5, 1994 (the "VaAve Ground
Lease") between Millbank VaAve, NIRF and Bles South Limited Partnership
("BSLP"). Finally, National Intergroup Realty Riva, Inc. ("NIRR") owns a one
percent (1%) general partnership interest and National Intergroup Realty
Corporation ("NIRC") owns a forty-nine percent (49%) limited partnership
interest in Millbank Partners - Riva Limited Partnership ("Millbank Riva").
Millbank MassAve, Millbank VaAve and Millbank Riva are collectively referred to
as the "Partnerships." NIRC, NIRD, NIRF and NIRR are collectively referred to as
the "Sellers." The general and limited partnership interests of the Sellers in
the Partnerships are collectively referred to as the "Partnership Interests."
The Partnership Interests, the tenant in common interest of NIRF in the VaAve
Land, and ground lease interest of NIRF in the VaAve Ground Lease are
collectively referred to as the "Interests."
The purpose of this letter agreement (this "Agreement") is to set forth
the terms upon which (a) the Sellers and Bernstein (as defined below) will
cooperate to market and sell the Interests which relate to the land, business
and improvements located at 2601 Virginia Avenue, N.W., Washington DC, i.e.,
Millbank VaAve, the VaLand and the VaAve Ground Lease, (collectively, the
"Premier") and (b) The Bernstein Companies or its affiliates (collectively,
"Bernstein"), or their designee(s)
<PAGE>
(Bernstein or such designee(s) are collectively referred to as the "Purchaser")
will purchase all of the Sellers' Interests in Millbank MassAve and Millbank
Riva . As you are aware, each of the Partnerships has outstanding external
indebtedness and consents will be required from the holders of such indebtedness
as a condition to the Purchaser's performance of the transactions contemplated
by this Agreement. Bernstein shall endeavor to obtain the necessary consents
from all applicable lenders.
The transaction would be structured as follows:
1. Premier Sale.
A. The Sellers and Bernstein shall cooperate in an effort to sell the
Premier on commercially reasonable terms as soon as practicable (the "Premier
Closing"). The Sellers and Bernstein agree to sell the Premier as follows: (a)
during the sixty (60) day period from the date of this Agreement, the Sellers
and Bernstein shall be required to accept an offer and sell the Premier in any
transaction yielding Net Proceeds of $9 million or more (in addition to any
payment by Bernstein pursuant to Section 1C); (b) thereafter the Sellers and
Bernstein shall be required to accept an offer and sell the Premier in any
transaction yielding Net Proceeds of $7.5 million or more (in addition to any
payment by Bernstein pursuant to Section 1C); or (c) in a transaction mutually
acceptable to the Sellers and Bernstein.
B. The Net Proceeds from the Premier Closing shall be paid or credited to
the Sellers. "Net Proceeds" means the total purchase price for the sale of the
Premier after reduction for any and all costs associated with the Premier
Closing, including, but not limited to, commissions, closing expenses,
prepayment penalties, termination fees and third party secured debt obligations.
If the Net Proceeds from the sale of the Premier are less than $12 million,
Bernstein shall pay to the Sellers the difference between the actual amount of
the Net Proceeds and $12 million as set forth more specifically herein.
C. If the Net Proceeds are less than $12 million, Bernstein shall pay to
the Sellers an amount equal to the difference between the Net Proceeds and $12
million (the "Difference"). The Difference shall be paid, at the Premier
Closing, as follows:
i. The first $1 million of the Difference shall be paid in cash
(the "Cash Payment"); and
ii. The remainder of the Difference shall be paid by a Promissory
Note made by the Purchaser in favor of the Sellers (the
"Note"). The Note shall be payable in two principal payments,
the first of which shall be due in one year following the
Premier Closing. The first principal payment shall be the
greater of $1,000,000 or1/2of the principal amount of the
Note. The balance of the Note shall be due and payable upon
the second anniversary of the Premier Closing. Interest shall
accrue on the outstanding principal balance of the Note from
time to time at an annual rate of 7%. All accrued but unpaid
interest shall be payable quarterly in arrears. The Note shall
be secured by the partnership interest of the Purchaser in
Millbank Riva and Millbank
<PAGE>
Mass. Ave. A guarantee of The Bernstein Companies may be
required if additional debt is secured by any property owned
by Millbank Riva or Millbank Mass Ave.
iii. If the Note and security agreement contemplated by Section
1(c)(ii) above are issued, then (a) the Millbank Riva and
Millbank Mass.Ave. Partnerships may only make payments with
respect to money loaned from related parties (i) in the
ordinary course of business and (ii) to repay loans made after
the Premier Closing, and (b) neither Partnership shall make
any distributions to its partners (except with respect to
income tax obligations) until the Note is paid in full.
D. Bernstein may, but shall not be required to, purchase the Premier.
E. Bernstein shall execute a $1,000,000 note payable to the Sellers in the
form attached as Exhibit A (the "Initial Note"). The Initial Note will be due on
the earlier of the Premier Closing or August 31, 1999. At the Premier Closing,
if it occurs, the principal amount of the Initial Note shall represent (and be
adjusted to) the cash portion, if any, of the Difference. If the Premier Closing
does not occur by August 31, 1999 (or by such later date as the parties may
mutually agree), (a) the Initial Note shall be paid in full on such date,
subject to reduction by the amount of any required capital contributions to the
properties made by Bernstein prior to August 31, 1999 (or such later date as the
parties may mutually agree) and (b) this Agreement shall terminate and be of no
further force and effect.
2. Riva and Mass. Ave.
At (or contemporaneously with) the Premier Closing, the Sellers shall
transfer or contribute to Bernstein, or to an entity or entities designated by
Bernstein, all of the Sellers' interest in Millbank Riva and Millbank Mass. Ave.
Such transfer shall be made effective upon the Premier Closing and the payment
of the Difference as set forth in Section. 1C Any payment made by Bernstein in
accordance with Section 1C shall be allocated among the Interests as determined
by Bernstein.
3. Capital Contributions Prior to Closing
From and after the date hereof through any termination of this Agreement,
the Sellers shall not have any obligation to fund any capital needs of the
Partnerships, nor shall the Sellers be entitled to receive any distributions or
other consideration from any of the Interests, other than the $12.0 million
payment set forth in Section 1B. Until the Premier Closing, Bernstein shall fund
all negative cash flow requirements of the Partnerships as additional equity and
provide notice to Sellers of such requirements prior to funding. Until the
Premier Closing, no distribution or allocation of cash or property shall be made
by any of the Partnerships to Bernstein, and after the Premier Closing such
distributions shall be subject to Section 1(C)(iii) above. In the event that the
Premier Closing does not occur by August 31, 1999, or later if mutually agreed,
then any required equity contributed by Bernstein will reduce the Initial Note
by a like amount and to the extent of any reduction of the Initial Note, the
equity contributions will be credited to the capital account of the applicable
Seller
<PAGE>
entity (a "Special Capital Credit"). Notwithstanding the foregoing, if the
Premier is under contract, the parties will cooperate to extend the August 31,
1999 date to accommodate a timely closing.
4. Closing
At the Premier Closing, the applicable Sellers will execute the following
instruments (collectively, the "Transfer Instruments"): (a) assignments of the
Interests, including specific assignments of the Partnership Interests; (b)
amendments to the certificates of limited partnership and partnership agreements
of the Partnerships; (c) a release releasing each of the Partnerships and BSLP,
and all other partners from any further claims or causes of action (such release
shall be mutual and accordingly shall also be executed by the applicable
Purchaser and/or Bernstein entity); (d) a special warranty deed, in recordable
form, conveying NIRF's tenant in common interest in the VaAve Land, to be
recorded among the land records of the District of Columbia (the "Land
Records"); (e) an assignment by NIRF of its interest in the VaAve Ground Lease,
in recordable form, to be recorded among the Land Records; (f) an amendment to
the Memorandum of Lease with respect to the VaAve Ground Lease, in recordable
form, to be recorded among the Land Records; (g) an amendment to the CoTenancy
Agreement between NIRF and BSLP dated October 5, 1994; (h) an owner's affidavit
and other documents required by any title insurance company or otherwise
necessary to effect the recordation of documents with respect to the VaAve Land
and VaAve Ground Lease; and (i) (together with Bernstein and the Purchasers)
such other instruments as the Purchasers or the Sellers may reasonably request
Bernstein and the Purchasers shall also use their commercially reasonable
efforts to obtain releases of the Sellers and Avatex Corporation from the
Partnerships' secured lenders, and either (a) the Premier Closing shall be
conditioned upon receipt of releases of the Sellers by such lenders or (b) the
transaction shall be structured as a sale of stock in Sellers by Avatex
Corporation. Except as provided in Section 1C (governing closing costs for the
Premier), all costs incurred in closing the transaction contemplated by this
Agreement, including any and all filing and recording costs, fees and charges,
will be shared equally by the Purchasers and the Sellers, provided that each
party shall bear the cost of its own counsel.
5. The Sellers understand and agree that Bernstein shall be entitled to
designate the actual entities that shall purchase each of the Interests. In
connection therewith, Bernstein may elect to effectuate the transfer of all or a
portion of the Interests to minimize the tax implications for Bernstein. In
addition, the Sellers understand and agree that Bernstein may elect to sell to
third parties all or a portion of the assets held by the Partnerships, or
certain of the Interests as a condition to the Premier Closing. The Sellers
agree to cooperate with Bernstein to effectuate such sales or transfers upon
such terms as Bernstein deems appropriate. In connection with the foregoing,
each of the Sellers hereby authorizes each of the Partnerships and Bernstein to
take such actions and to execute such documents on behalf of the Partnerships
(and, in connection with the VaAve Land and the VaAve Ground Lease, the Sellers)
as may be necessary to effectuate the sale of any and all assets of the
Partnerships, or of the Interests, upon such terms and conditions as Bernstein
deems appropriate. Each Seller will execute a resolution confirming such
authorization in a form acceptable to the Purchasers.
6. At the Premier Closing, the items to be delivered pursuant to this
Agreement shall be delivered to a mutually acceptable escrow agent who, upon
receiving all items, shall then deliver
<PAGE>
the payments required by this Agreement and the Transfer Instruments in
accordance with the terms hereof.
7. The Sellers shall make no representations or warranties regarding the
Partnerships or the Interests other than the following which the Sellers,
jointly and severally, represent and warrant are true and correct as of the date
hereof and at the Premier Closing:
a. The Interests are owned in their entirety by either NIRC, NIRD,
NIRF or NIRR free of all liens, encumbrances or restrictions whatsoever and that
the Sellers are not subject to any agreement, law, court decision,
administrative decision or other binding obligation of any kind that would
restrict the Sellers from entering into this Agreement and consummating the sale
of the Interests;
b. This Agreement and all instruments to be executed pursuant to
this Agreement have been duly and validly authorized by all necessary action of
the Sellers and have been or will be at the Premier Closing duly and validly
executed and delivered and are enforceable in accordance with their terms,
except, with respect to enforceability, subject to customary qualifications. At
the Premier Closing, each of the Sellers agrees to provide copies of board of
director resolutions ratifying this Agreement and the transactions set forth
herein;
c. The Sellers, as partners of the Partnerships or otherwise in
connection with their ownership of the Interests, have not taken any actions or
entered into any agreements on behalf of themselves or any of the Partnerships
that are binding upon any of the Partnerships or would cause any of such
Partnerships, Bernstein or the Purchasers to have any liability whatsoever
(other than actions also executed by the applicable Bernstein entity); and
d. None of the Sellers is currently "insolvent" as such term is used
in the Bankruptcy Code, and none of the Sellers will be rendered "insolvent" by
the consummation of the transactions set forth herein.
8. Bernstein and the Purchasers shall make no representations or
warranties regarding the Partnerships or the Interests other than the following
which Bernstein and the Purchasers, jointly and severally, represent and warrant
are true and correct as of the date hereof and at the Premier Closing:
a. Bernstein and the Purchasers are not subject to any agreement,
law, court decision, administrative decision or other binding obligation of any
kind that would restrict them from entering into this Agreement and consummating
the sale of the Interests;
b. This Agreement and all instruments to be executed pursuant to
this Agreement have been duly and validly authorized by all necessary action of
Bernstein and have been or will be at the Premier Closing duly and validly
executed and delivered and are enforceable against the Purchasers in accordance
with their terms, except, with respect to enforceability, subject to customary
qualifications. At the Premier Closing, Bernstein and each of the Purchasers
agrees to provide copies of board of director resolutions ratifying this
Agreement and the transactions set forth herein; and
<PAGE>
c. Bernstein is not currently "insolvent" as such term is used in
the Bankruptcy Code, and Bernstein will not be rendered "insolvent" by the
consummation of the transactions set forth herein.
9. The parties to this Agreement agree that the transactions contemplated
by this Agreement are subject to (a) the approval of this Agreement and the
transactions contemplated hereby by the Boards of Directors of Avatex
Corporation and Sellers (the "Board Approval") and (b) the receipt by Avatex
Corporation and the Sellers of the opinion of Valuation Services, Inc. that the
consideration to be received by Sellers in the transactions contemplated hereby
is reasonable consideration to pay for the purchase of the Interests (the
"Opinion"). The Sellers agree to use their best efforts to obtain the Board
Approval as rapidly as possible (but in any event within two (2) weeks) after
the date of this letter agreement and to obtain the Fairness Opinion as rapidly
as possible (but in any event within four (4) weeks) after the date of this
letter. The Sellers shall notify Bernstein in writing as rapidly as possible
(but in any event within three (3) business days) after obtaining each of the
Board Approval and the Opinion. If (a) the Board Approval is not obtained within
such two (2) week period or (b) despite Sellers' best efforts, Valuation
Services, Inc. states in writing at the end of such four (4) week period that it
is unable to deliver an Opnion, this Agreement shall terminate and be of no
further force and effect.
10. This Agreement shall be governed by the laws of the State of Maryland.
In the event of a breach of this Agreement by any party, the nonbreaching party
shall be entitled to all rights available in law or equity including
reimbursement for all attorney fees and court costs.
11. This Agreement is intended to be the legal and binding obligation of
the parties binding on their successors and assigns.
[SIGNATURE PAGE FOLLOWS.]
<PAGE>
We believe we have summarized the agreement between the parties regarding
the sale of the Interests. If you agree, please execute below whereupon this
will become the binding obligation of the parties.
Sincerely yours,
The Bernstein Companies
By: /s/ Adam Bernstein
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Name: Adam Bernstein
Title: President
Agreed to as of this 8th day of March, 1999:
Avatex Corporation
By: /s/ Grady E. Schleier
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Name: Grady E. Schleier
Title: Vice President and Treasurer
National Intergroup Realty Corporation
By: /s/ Grady E. Schleier
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Name: Grady E. Schleier
Title: Vice President and Treasurer
National Intergroup Realty Development, Inc.
By: /s/ Grady E. Schleier
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Name: Grady E. Schleier
Title: Vice President and Treasurer
National Intergroup Realty Funding, Inc.
By: /s/ Grady E. Schleier
------------------------------------
Name: Grady E. Schleier
Title: Vice President and Treasurer
National Intergroup Realty Riva, Inc.
By: /s/ Grady E. Schleier
------------------------------------
Name: Grady E. Schleier
Title: Vice President and Treasurer
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$1,000,000 March 4, 1999
FOR VALUE RECEIVED, the undersigned ("Maker"), hereby promises to pay to
the order of Avatex Corporation ("Payee"), at 5910 North Central Expressway,
Suite 1780, Dallas, Texas 75206, or at such other address as the holder hereof
advises in writing from time to time, the principal sum of $1,000,000 as
described herein. Capitalized terms used in this Note and not otherwise defined
shall have the meanings set forth in that certain letter agreement dated March
__, 1999, between Maker, Payee, et al, as it may be amended from time to time
(the "Agreement"). This Note is the Initial Note to be delivered pursuant to the
Agreement (and is subject to the Agreement). The principal amount of this Note
shall be reduced in accordance with Sections 1E and 3, and this Note shall be
returned to Bernstein if the Agreement is terminated pursuant to Section 9 of
the Agreement This Note shall not bear interest (except as provided below).
The principal of this Note shall be due and payable on the earlier of
August 31, 1999 (or such later date as die parties to the Agreement mutually
agree) or the Premier Closing (the "Maturity Date").
No interest shall be owed on this Note prior to the Maturity Date. If the
principal amount of this Note is not paid by the Maker on or before the Maturity
Date, then the amount owing to the Payee shall bear interest, beginning on the
day after the Maturity Date, through the date of payment, at a rate of twelve
percent (12%) simple interest per year. The provisions of this paragraph shall
not be construed as waiving the right of the holder hereof to punctual payment
of principal when due hereunder.
The holder hereof may declare the entire unpaid principal of this Note
immediately due and payable, without notice, demand, or presentment, all of
which are hereby waived, offset against this Note any sum or sums owed by the
holder hereof to Maker, or exercise any other right or remedy to which the
holder hereof may be entitled by agreement, at law, or in equity, if (a) Maker
fails or refuses to pay this Note in fill on the Maturity Date, or (b) Maker
shall voluntarily or involuntarily be made the subject of any proceeding
provided for by any bankruptcy or similar debtor relief laws (and, in the event
of an involuntary proceeding) such proceeding is not dismissed within sixty (60)
days). Each right and remedy available to the holder hereof shall be cumulative
of and in addition to each other such right and remedy. No delay on the part of
the holder hereof in the exercise of any right or remedy available to the holder
hereof shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy preclude other or further exercise thereof
or exercise of any other such right or remedy.
If this Note is placed in the hands of an attorney for collection, or if
this Note is collected through any legal proceedings, Maker agrees to pay all
court costs, reasonable attorneys' fees, and other costs of collection of the
holder hereof.
The Maker hereby waives demand for payment, presentment for payment,
notice of nonpayment, protest, notice of protest, notice of dishonor, notice of
intention to accelerate maturity, notice of acceleration of maturity, notice of
intent to foreclose on any collateral securing this Note, and all other notices
as to this Note and diligence in collection as to each and every payment due
<PAGE>
hereunder, and agrees that without any notice the holder hereof may take
additional security herefor or may release any or all security herefor, or
alone, or together with any present or future owner or owners of any property
covered by any instrument or agreement given to secure this Note, may from time
to time extend, renew or otherwise modify the date or dates or amount or amounts
of payment above recited, or the holder hereof -may from time to time release
any part or parts of the property and interests securing this Note, with or
without consideration, and that in any such case, the Maker and any endorser,
surety, and guarantor shall continue to be bound hereby and to be liable to pay
the unpaid balance of the indebtedness evidenced hereby, as so additionally
secured, extended, renewed, or modified, notwithstanding any such release.
This Note shall be construed m accordance with and be governed by the laws
of the State of Maryland for all purposes.
Any notice or other communication required or permitted under this
Agreement shall be in writing and delivered personally or sent by registered or
certified mail (return receipt requested), or by telecopy to:
To Payee: Avatex Corporation
5910 North Central Expressway, Suite 1780
Dallas, Texas 75206
Attn: General Counsel
To Maker: The Bernstein Companies
3299 K Street, N.W., Suite 700
Washington, DC 20007
Attn: Adam Bernstein
With a copy (which, standing alone, shall not constitute notice) to:
Swidler Berlin Shereff Friedman, LLP
3000 K Street, N.W., Suite 300
Washington, DC 20007
Attn: Andrew Ray, Esq.
or such other address as shall be furnished in writing by any of the parties.
Any such notice or communication shall be deemed to have been effectively given
as of the date so delivered personally, so mailed, or so transmitted by telecopy
(except that a notice of change of address shall not be deemed to have been
given until received by the addressee).
IN WITNESS WHEREOF, Maker has executed and delivered this Note on March
__, 1999.
Maker: The Bernstein Companies
By: _____________________
Name: _____________________
Title: _____________________
EXHIBIT 99
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<PAGE>
For: Avatex Corporation
Contact: Grady E. Schleier
Vice President and Treasurer
(214) 365-7450
FOR IMMEDIATE RELEASE
- ---------------------
AVATEX CORPORATION ANNOUNCES AGREEMENT
TO SELL REMAINING REAL ESTATE INTERESTS
---------------------------------------
DALLAS, TX -- MAY 12, 1999 -- AVATEX CORPORATION (OTCBB: AVAX) today
announced that it has reached an agreement to sell its interests in the three
remaining real estate developments that it currently owns. Each of the projects
is owned and operated by a separate real estate limited partnership, and Avatex,
through one or more wholly-owned subsidiaries, owns a general partnership
interest and a limited partnership interest in each of the limited partnerships.
Avatex has agreed with its partner in the limited partnerships, The Bernstein
Companies and its affiliates, that (i) one of the limited partnerships will sell
a 194 room hotel located in the northwest area of Washington, D.C. to a third
party pursuant to an Agreement of Sale executed on May 7, 1999, and (ii) Avatex
will transfer its partnership interests in the other two limited partnerships to
its other partner in the partnerships or another affiliate of The Bernstein
Companies. These other two limited partnerships own and operate (i) a 156 room
hotel located in the Thomas Circle area of Washington, D.C. and (ii) a 38,510
square foot office building and a 150 room hotel located in Annapolis, Maryland.
Based on its agreement with The Bernstein Companies, Avatex expects to
receive a total of approximately $12 million as a result of these transactions,
of which approximately $11.4 million will be in cash and approximately $600,000
will be in the form of a one year secured note. Avatex expects to recognize an
approximate $6 million gain upon the closing of these transactions, which the
parties anticipate will occur on or about May 27, 1999. Assuming the
transactions close, Avatex will no longer own any interests in real estate
developments.
Avatex is a holding company that, along with its subsidiaries, owns
interests in other corporations and partnerships. Through Phar-Mor, Inc., its
38% owned subsidiary, Avatex is involved in operating a chain of retail discount
drug stores devoted to the sale of prescription and over-the-counter drugs,
health and beauty aids and other general merchandise.
