ONCOR INC, 8-K, 1999-12-21

ONCOR INC
8-K, 1999-12-21
IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 12, 1999
-----------------

Oncor, Inc.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)

Maryland
----------------------------------------------
(State or Other Jurisdiction of Incorporation)

0-16177 52-1310084
- ------------------------ ------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)

15200 Shady Grove Road, Suite 350, Rockville, MD 20850
- ------------------------------------------------ ----------
(Address of Principal Executive Offices) (Zip Code)

(301) 527-2222
------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)

209 Perry Parkway, Gaithersburg, MD 20877
--------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)

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Item 5. Other Events

On November 12, 1999, the U.S. Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court") signed an order pursuant to section 1125 of the
Bankruptcy Code approving Oncor, Inc.'s (the "Company's") and Codon
Pharmaceuticals, Inc.'s Disclosure Statement regarding their proposed
liquidating chapter 11 plans (the "Plans") (In re: Codon Pharmaceuticals, Inc.
and Oncor, Inc., Case No. 99-436). Pursuant to section 1128 of the Bankruptcy
Code, the Bankruptcy Court has scheduled a hearing to consider confirmation of
the Plans on January 12, 2000, at 12:30 p.m., Eastern Time, in the Courtroom of
the Honorable Joseph J. Farnan, Jr., Chief United States District Court Judge,
844 King Street, Wilmington, DE 19801.

Under the Company's Plan, as proposed, all equity interests in Oncor would be
cancelled without payment or consideration. In addition, the proposed Company
Plan provides for the payment of administrative expenses and priority tax claims
in cash in full, and for the partial payment of all other claims (other than
those related to the Company's equity interests).

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

99.1 Order pursuant to section 1125 of the Bankruptcy Code
approving Oncor, Inc.'s and Codon Pharmaceuticals, Inc.'s Disclosure Statement
regarding their proposed liquidating chapter 11 plans (In re: Codon
Pharmaceuticals, Inc. and Oncor, Inc., Case No. 99-436)

<PAGE>

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.

Oncor, Inc.
-------------------------------------------
(Registrant)

By: /s/ Joseph R. Shaya
------------------------------------
Name: Joseph R. Shaya
Title: Acting President and Chief Executive
Officer

Dated: December 15, 1999

<PAGE>

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: ) Chapter 11
)
CODON PHARMACEUTICALS, INC. ) Case No. 99-436 (JJF)
and ONCOR, INC., ) (Jointly Administered)
)
Debtors. )

SECOND AMENDED JOINT DISCLOSURE STATEMENT
PURSUANT TO SECTION 1125 OF THE BANKRUPTCY
CODE REGARDING AMENDED LIQUIDATING
CHAPTER 11 PLANS PROPOSED BY THE DEBTORS

YOUNG CONAWAY STARGATT & TAYLOR
S. David Peress (No. 2679)
Pauline K. Morgan (No. 3650)
Edwin J. Harron (No. 3396)
11th Floor, Rodney Square North
P. O. Box 391
Wilmington, Delaware 19899-0391
Telephone: (302) 571-6600
Facsimile: (302) 571-1253

Counsel for the Debtors and Debtors in Possession

Dated: November 12, 1999

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TABLE OF CONTENTS
<TABLE>
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Page

<S> <C>
I. INTRODUCTION.........................................................................................1

II. NOTICE TO HOLDERS OF CLAIMS.........................................................................1

III. EXPLANATION OF CHAPTER 11..........................................................................3
A. Overview of Chapter 11.................................................................3
B. Chapter 11 Plan .......................................................................3

IV. OVERVIEW OF THE PLANS...............................................................................5
A. General................................................................................5
1. Oncor, Inc. Plan.....................................................5
2. Codon Pharmaceuticals, Inc. Plan.....................................6
B. Classified and Treatment Summary.......................................................6
1. Oncor, Inc. Plan.....................................................6
a. Unclassified Claims..........................................6
2. Codon Pharmaceuticals, Inc. Plan.....................................8
a. Unclassified Claims..........................................8
C. Classified Claims and Interests........................................................9

V. HISTORY AND BUSINESS OF THE DEBTORS.................................................................13
A. Description of Business...............................................................13
B. History...............................................................................13

VI. THE CHAPTER 11 CASE................................................................................13
A. Factors Leading to Chapter 11 Filing..................................................13
B. Commencement of the Chapter 11 Case...................................................15
C. Significant Postpetition Events.......................................................15
1. Sale of Assets (Oncor, Inc.)........................................15
a. License Agreements with The Johns Hopkins
University..................................................15
b. Sunrise(TM) Properties......................................16
2. Litigation......................................................... 16
a. Actual Litigation (Oncor, Inc.).............................16
i. RCAT Partners L.L.C................................16
b. Potential Litigation........................................16
D. Other Assets of the Debtors
1. Gene Logic, Inc. Stock (Oncor, Inc.)................................17
2. Miscellaneous Assets................................................17
E. Representation of the Debtors.........................................................17
F. Committee.............................................................................18

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i
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<S> <C> <C>
G. Schedules and Bar Date
1. Setting of Bar Date and Filing of Schedules..................................18

VII. SUMMARY OF THE PLAN OF REORGANIZATION.............................................................18
A. General...............................................................................18
B. Classification and Treatment of Claims and Interests..................................19
1. Oncor, Inc.
a. Unclassified Claims.........................................19
i. Administrative Expenses............................19
ii. Priority Tax Claims................................20
b. Classified Claims and Equity Interests......................20
i. Class O1 - NTFC Capital Corp. Secured
Claim..............................................20
ii. Class O2 - Other Priority Claims...................21
iii. Class O3 - General Unsecured Claims................21
iv. Class O4 - Subordinated Promethean
Unsecured Claims..........................21
v. Class O5 - Equity Interests........................21
2. Codon Pharmaceuticals, Inc.
a. Unclassified Claims.........................................22
i. Administrative Expenses............................22
ii. Priority Tax Claims................................23
b. Classified Claims and Equity Interests......................23
i. Class C1 - General Unsecured Claims................23
ii. Class C2 - Equity Interests........................23
C. Estimation of Amounts of Claims.......................................................23
D. Acceptance or Rejection of Plans......................................................23
1. Classes Entitled to Vote............................................23
2. Class Acceptance Requirement........................................24
3. Cramdown............................................................24
4. Cure Payments and Release of Liability..............................24
E. Means of Implementation of the Plans..................................................24
1. Dissolution of Committee............................................24
2. Post-Effective Date Committee.......................................25
3. Post-Effective Date Committee Compensation..........................25
4. Retention of Professioinals.........................................25
5. Powers and Duties of the Post-Effective Date Committee..............25
6. Powers and Duties of the Plan Agent.................................26
7. Corporate Action....................................................26
8. Canceled Documents..................................................26
9. Vesting of Assets...................................................26
10. Assumption of Liabilities...........................................26
11. Winding Up Affairs..................................................26
12. Maintenance, Safekeeping and Liquidation of Assets..................27
13. Distributable Cash..................................................27
14. No Court Involvement or Supervision.................................27

</TABLE>
ii

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<TABLE>
<CAPTION>
<S> <C> <C>
15. Revocation..........................................................27
16. Record Keeping and Information ....................................28
17. Payment of Post-Confirmation Quarterly Fees.........................28
18. Release of Liens....................................................28
F. Provisions Governing Distribution.....................................................28
1. Distributions.......................................................28
2. Delivery of Distributions...........................................28
3. Time Bar to Cash Payments...........................................28
4. De Minimis Distributions ...........................................29
5. No Interest Unless Otherwise Provided...............................29
G. Procedures for Resolving and Treating Contested and
Contingent Claims.....................................................................29
1. Objection Deadline..................................................29
2. Responsibility for Objecting to Claims..............................29
3. Administration of Contested Claims..................................30
a. No Distribution Pending Allowance...........................30
b. Contested Claims Reserve....................................30
c. Distribution After Allowance................................30
d. Distribution After Disallowance.............................30
H. Executory Contracts and Leases........................................................30
1. General Treatment: Rejected If Not Assumed..........................30
2. Bar to Rejection Damages............................................31
3. Rejection Claims....................................................31
I. Maintenance of Causes of Action.......................................................31
J. Conditions Precedent to Effectiveness of Plans........................................31
K. Consummation of the Plans.............................................................31
1. Retention of Jurisdiction...........................................31
2. Abstention and Other Courts.........................................33
3. Nonmaterial Modifications...........................................33
4. Material Modifications..............................................33
L. Limited of Liability, Releases and Injunction.........................................33
1. Exculpations........................................................33
2. Limited Release.....................................................34
3. Injunction .........................................................34
M. Miscellaneous Provisions..............................................................34
1. Severability........................................................34
2 Setoffs ............................................................35
3. Compliance with All Applicable Laws.................................35
4. Binding Effect......................................................35
5. Governing Law.......................................................35
6. Payment of Statutory Fees ..........................................35
7 Timing of Distributions.............................................35

VIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN..............................................35

IX. SELECTED FINANCIAL INFORMATION.....................................................................37

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iii

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<S> <C>
X. CONFIRMATION OF THE PLAN............................................................................37
A. Solicitation of Votes; Voting Procedures..............................................37
1. Ballots and Voting Deadlines........................................37
2. Parties in Interest Entitled to Vote................................37
3. Definition of Impairment............................................38
4. Classes Impaired Under the Plan.....................................38
5. Vote Required for Class Acceptance..................................39
B. Confirmation Hearing..................................................................39
C. Requirements for Confirmation of the Plan.............................................40
D. Cramdown..............................................................................42

XI. RISK FACTORS.......................................................................................44
A. Claim Resolution Risks................................................................44
B. Bankruptcy Risks......................................................................44
1. Insufficient Acceptances............................................44
2. Confirmation Risks..................................................44
C. Conditions Precedent..................................................................45

XII. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN.........................................45
A. Chapter 7 Liquidation Alternative.....................................................45
B. Alternatives if Plan is not Confirmed.................................................45

XIII. CONCLUSION.......................................................................................46

</TABLE>

<PAGE>

I. INTRODUCTION

Codon Pharmaceuticals, Inc. ("Codon") and Oncor, Inc. ("Oncor"),
debtors and debtors-in-possession in the above-referenced jointly administered
chapter 11 cases (the "Debtors"), submit this amended disclosure statement
pursuant to section 1125 of the Bankruptcy Code regarding their proposed
liquidating chapter 11 plans (the "Disclosure Statement"). This Disclosure
Statement is to be used in connection with the solicitation of votes on the
respective chapter 11 plans of liquidation proposed by each of the Debtors,
dated November 12, 1999 (each a "Plan" and, collectively, the "Plans"). A copy
of the Plan proposed by Oncor (the "Oncor Plan") is attached hereto as Exhibit
A, and a copy of the Plan proposed by Codon (the "Codon Plan") is attached
hereto as Exhibit B. Unless otherwise defined herein, terms used herein have the
meanings ascribed thereto in the respective Plan of each Debtor (see Article I
of the Plans entitled "Definitions").

For a more detailed summary of the proposed treatment of your Claim or
Equity Interest under the Plans, please see the charts below.

II. NOTICE TO HOLDERS OF CLAIMS

The purpose of this Disclosure Statement is to enable creditors whose
Claims are impaired to make an informed decision in exercising their right to
vote to accept or reject the applicable Plan. Holders of such Codon Claims vote
on the Codon Plan, and holders of such Oncor Claims vote on the Oncor Plan.
Holders of both such Oncor Claims and Codon Claims vote on both Plans.

THIS DISCLOSURE STATEMENT CONTAINS INFORMATION THAT
MAY BEAR UPON YOUR DECISION TO ACCEPT OR REJECT THE
APPLICABLE PLAN. PLEASE READ THIS DOCUMENT WITH CARE.

On November 12, 1999, the Bankruptcy Court signed an order pursuant to
section 1125 of the Bankruptcy Code (the "Disclosure Statement Order") approving
this Disclosure Statement as containing information of a kind, and in sufficient
detail, adequate to enable a hypothetical, reasonable investor, typical of the
solicited holders of Claims against and Equity Interests in either of the
Debtors, to make an informed judgment with respect to the acceptance or
rejection of the applicable Plan. A copy of the Disclosure Statement Order is
included in the materials accompanying this Disclosure Statement. APPROVAL OF
THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT DOES NOT CONSTITUTE A
DETERMINATION BY THE BANKRUPTCY COURT REGARDING THE FAIRNESS OR MERITS OF EITHER
OF THE PLANS.

THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN.

<PAGE>

Each holder of a Claim entitled to vote to accept or reject either of
the Plans should read this Disclosure Statement and the applicable Plan in their
entirety before voting. Since Equity Interests will be canceled under the Plans,
the Holders of Equity Interests are deemed to reject the Plans and, therefore,
are not entitled to vote. No solicitation of votes to accept or reject either of
the Plans may be made except pursuant to this Disclosure Statement and section
1125 of the Bankruptcy Code. Except for the Debtors and their professionals, no
person has been authorized to use or promulgate any information concerning the
Debtors, their businesses, or their Plans, other than the information contained
herein, in connection with the solicitation of votes to accept or reject the
Plans. No holder of a Claim entitled to vote on either of the Plans should rely
upon any information relating to the Debtors, their businesses, or the Plans,
other than that contained in the Disclosure Statement and the exhibits thereto.
Unless otherwise indicated, the sources of all information set forth herein are
the Debtors and their professionals.

After carefully reviewing this Disclosure Statement, including the
attached exhibits, please indicate your acceptance or rejection of the Plan
which will affect your Claim by voting in favor of or against that Plan on the
enclosed ballot and returning the same to the address set forth on the ballot,
in the enclosed return envelope so that it will be received by the Debtors'
tabulation agent at the following address: Oncor, Inc. 15200 Shady Grove Road,
Suite 350, Rockville, MD 20850, Attn: Donald Capretta, no later than 4:00 p.m.,
Eastern Time, on December 30, 1999.

If you do not vote to accept the Plan which affects your Claim or if
you are the holder of an unimpaired Claim, you may be bound by that Plan if it
is accepted by the requisite holders of Claims. See "Confirmation of the
Plans-Solicitation of Votes; Vote Required for Class Acceptance," and "Cramdown"
below.

TO BE SURE YOUR BALLOT IS COUNTED, YOUR BALLOT MUST BE RECEIVED NO
LATER THAN 4:00 P.M., EASTERN TIME, ON DECEMBER 30, 1999. For detailed voting
instructions and the name, address, and phone number of the person you may
contact if you have questions regarding the voting procedures, see "Confirmation
of the Plans-Solicitation of Votes; Voting Procedures-Parties In Interest
Entitled to Vote" below.

Pursuant to section 1128 of the Bankruptcy Code, the Bankruptcy Court
has scheduled a hearing to consider confirmation of the Plans (the "Confirmation
Hearing"), on January 12, 2000, at 12:30 p.m., Eastern Time, in the Courtroom of
the Honorable Joseph J. Farnan, Jr., Chief United States District Court Judge,
844 King Street, Wilmington, DE 19801. The Bankruptcy Court has directed that
objections, if any, to confirmation of either of the Plans be filed and served
on or before December 30, 1999 at 4:00 p.m., in the manner described under the
caption, "Confirmation of the Plans-Confirmation Hearing" below.

THE DEBTORS AND THEIR OFFICIAL COMMITTEE OF UNSECURED CREDITORS SUPPORT
CONFIRMATION OF THE PLANS AND URGE ALL CREDITORS TO ACCEPT THE PLANS.

<PAGE>

III. EXPLANATION OF CHAPTER 11

A. Overview of Chapter 11

Chapter 11 is the principal reorganization chapter of the Bankruptcy
Code. Pursuant to chapter 11, a debtor in possession attempts to reorganize its
business for the benefit of the debtor, its creditors, and other parties in
interest. The present chapter 11 cases commenced with the filing of voluntary
chapter 11 petitions by each of the Debtors on February 26, 1999. The chapter 11
cases are being jointly administered in the United States Bankruptcy Court for
the District of Delaware under Case No. 99-436 (JJF).

The commencement of a chapter 11 case creates an estate comprising all
the legal and equitable interests of the debtor in property as of the date the
petition is filed. Sections 1101, 1107, and 1108 of the Bankruptcy Code provide
that a debtor may continue to operate its business and remain in possession of
its property as a "debtor in possession" unless the bankruptcy court orders the
appointment of a trustee. In the present Chapter 11 Cases, the Debtors have
remained in possession of their properties and have continued to operate their
businesses as debtors in possession.

The filing of a chapter 11 petition also triggers the automatic stay
provisions of the Bankruptcy Code. Section 362 of the Bankruptcy Code provides,
among other things, for an automatic stay of all attempts to collect prepetition
claims from the debtor or otherwise interfere with its property or business.
Except as otherwise ordered by the bankruptcy court, the automatic stay remains
in full force and effect until the effective date of a confirmed plan of
reorganization.

The formulation of a chapter 11 plan is the principal purpose of a
chapter 11 case. The plan sets forth the means for satisfying the claims against
and interests in the debtor. Generally, unless a trustee is appointed, only the
debtor may file a plan during the first 120 days of a chapter 11 case (the
"Exclusive Period"). However, section 1121(d) of the Bankruptcy Code permits the
court to extend or reduce the Exclusive Period upon a showing of "cause." In
this instance, the Bankruptcy Court extended the Exclusive Period by
approximately 75 days after the Debtors demonstrated a showing of such cause. In
any event, after the Exclusive Period has expired, a creditor or any other party
in interest may file a plan, unless the debtor has filed a plan within the
Exclusive Period, in which case, the debtor is generally given 60 additional
days (the "Solicitation Period") during which it may solicit acceptances of its
plan. The Solicitation Period may also be extended or reduced by the court upon
a showing of "cause."

B. Chapter 11 Plan

Although often referred to as a plan of reorganization, a plan may
provide anything from a complex restructuring of a debtor's business and its
related obligations to a simple liquidation of the debtor's assets. In these
cases, prior to the filing of the Plans, Oncor obtained Bankruptcy Court
approval for the sale of a substantial portion of its assets, in accordance with
the Bankruptcy Code. The Plans, as proposed by the Debtors, essentially

<PAGE>

provide for the liquidation of each of the Debtors' remaining assets and the use
of all liquidation proceeds to pay their respective creditors on a pro rata
basis-i.e., each creditor in a specific class will receive cash equal to the
same percentage of his or her claim as every other creditor in that class, until
every claim in that class is paid in full. Although the Debtors' estates may not
have enough Cash to pay all Claims in full, each Creditor can be assured that
all Creditors in the same Class will receive the same treatment.

After a plan of reorganization has been filed, the holders of impaired
claims against or interests in a debtor are permitted to vote to accept or
reject the plan. Before soliciting acceptances of the proposed plan, section
1125 of the Bankruptcy Code requires the debtor to prepare a disclosure
statement containing adequate information of a kind, and in sufficient detail,
to enable a hypothetical reasonable investor to make an informed judgment about
the plan. This Disclosure Statement is presented to holders of Claims against
the Debtors to satisfy the requirements of section 1125 of the Bankruptcy Code.

If all classes of claims and equity interests accept a plan of
reorganization, the bankruptcy court may nonetheless still not confirm the plan
unless the court independently determines that the plan satisfies the
requirements of section 1129 of the Bankruptcy Code. Section 1129 sets forth the
requirements for confirmation of a plan and, among other things, requires that a
plan meet the "best interests" test and be "feasible." The "best interests" test
generally requires that the value of the consideration to be distributed to the
holders of claims and equity interests under a plan may not be less than those
parties would receive if the debtor were liquidated pursuant to a hypothetical
liquidation occurring under chapter 7 of the Bankruptcy Code. Under the
"feasibility" requirement, the court generally must find that there is a
reasonable probability that the debtor will be able to meet its obligations
under its plan without the need for further financial reorganization.

The Debtors believe that their Plans satisfy all the applicable
requirements of section 1129(a) of the Bankruptcy Code, including, in
particular, the "best interests of creditors" test and the "feasibility"
requirement. The Debtors support confirmation of their respective Plans and urge
all holders of impaired Claims to accept the applicable Plan.

Chapter 11 does not require that each holder of a claim against or
interest in a debtor vote in favor of a plan of reorganization in order for the
bankruptcy court to confirm the plan. At a minimum, however, the plan must be
accepted by a majority in number and two-thirds in amount of those claims
actually voting in at least one class of impaired claims under the plan. The
Bankruptcy Code also defines acceptance of the plan by a class of equity
interests (equity securities) as acceptance by holders of two-thirds of the
number of shares actually voting. In the present case, only the holders of
Claims who actually vote will be counted as either accepting or rejecting the
applicable Plan.

Classes of claims or equity interests that are not "impaired" under a
plan of reorganization are conclusively presumed to have accepted the plan and
thus are not entitled to vote. Accordingly, acceptances of a plan will generally
be solicited only from those persons who hold claims or equity interests in an
impaired class. A class is "impaired" if the legal, equitable, or contractual
rights attaching to the claims or equity interests of that class

<PAGE>

are modified in any way under the plan. Modification for purposes of determining
impairment, however, does not include curing defaults and reinstating maturity
or payment in full in cash. In addition, classes of claims or equity interests
are deemed to reject a plan if such plan provides that the claims or equity
interests of such class do not entitle the holders of such claims or equity
interests to receive or retain any property under the plan. All classes of
Claims other than Allowed Administrative Expenses and Priority Tax Claims under
the Codon Plan are impaired, and thus entitled to vote on the Codon Plan.
General Unsecured Claims and Subordinated Promethean Claims under the Oncor Plan
are impaired, and thus entitled to vote on the Oncor Plan. The Debtors will not
solicit the votes of holders of Equity Interests under either Plan, since the
classes of Equity Interests are deemed to reject the Plans.

The bankruptcy court may also confirm a plan of reorganization even
though fewer than all the classes of impaired claims and equity interests accept
it. For a plan of reorganization to be confirmed despite its rejection by a
class of impaired claims or equity interests, the proponents of the plan must
show, among other things, that the plan does not "discriminate unfairly" and
that the plan is "fair and equitable" with respect to each impaired class of
claims or equity interests that has not accepted the plan.

Under section 1129(b) of the Bankruptcy Code, a plan is "fair and
equitable" as to a class of rejecting claims if, among other things, the plan
provides: (a) with respect to secured claims, that each such holder will receive
or retain on account of its claim property that has a value, as of the effective
date of the plan, equal to the allowed amount of such claim; and (b) with
respect to unsecured claims and equity interests, that the holder of any claim
or equity interest that is junior to the claims or equity interests of such
class will not receive or retain on account of such junior claim or equity
interest any property at all unless the senior class is paid in full.

A plan does not "discriminate unfairly" against a rejecting class of
claims if (a) the relative value of the recovery of such class under the plan
does not differ materially from that of any class (or classes) of similarly
situated claims, and (b) no senior class of claims is to receive more than 100%
of the amount of the claims in such class.

The Debtors believe that their Plans have been structured so that they
will satisfy these requirements as to any rejecting class of claims, and can
therefore be confirmed, if necessary, over the objection of any classes of
claims. The Debtors, however, reserve the right to request confirmation of
either or both of the Plans under the "cramdown" provisions of section 1129 of
the Bankruptcy Code.

<PAGE>

IV. OVERVIEW OF THE PLAN

A. General

1. ONCOR PLAN

The Oncor Plan provides for the orderly liquidation and distribution of
Oncor's Assets in accordance with the priorities set forth in the Bankruptcy
Code. The Oncor Plan provides for the payment of Administrative Expenses and
Priority Tax Claims in Cash in full on or as soon as practicable after the
Initial Distribution Date, the payment of the NTFC Capital Corp. Claim equal to
the Deemed Collateral Value of the Allowed NTFC Capital Corp. Secured Claim with
remaining funds to be used for payment of Other Priority Claims in full, and
then General Unsecured Claims and Subordinated Promethean Unsecured Claims on a
pro rata basis. Equity Interests in Oncor shall be canceled.

2. CODON PLAN

The Codon Plan provides for the orderly liquidation and distribution of
Codon's assets in accordance with the priorities set forth in the Bankruptcy
Code. The Codon Plan provides for the payment of Administrative Expenses and
Priority Tax Claims in Cash in full on or as soon as practicable after the
Initial Distribution Date. Remaining funds will be used for the payment of
General Unsecured Claims on a pro rata basis. Oncor is the only Holder of an
Equity Interest in Codon. Under the Codon Plan, Oncor's Equity Interest shall be
canceled.

B. Classification and Treatment Summary

1. ONCOR PLAN

The following table (Oncor Classes of Claims and Equity Interests)
provides a summary of the classification and treatment under the Oncor Plan of
Claims and Equity Interests. The Administrative Expenses and Priority Tax Claims
shown below constitute Oncor's estimate of the amount of such Claims to be paid
in cash on the Initial Distribution Date, taking into account amounts paid or
projected to be paid prior to that date. The total amount of Claims shown below
reflects Oncor's current estimate of the likely amount of such Claims, after the
resolution by settlement or litigation of Claims that Oncor believes are subject
to disallowance or reduction. Reference should be made to the entire Disclosure
Statement and to the Oncor Plan for a complete description of the classification
and treatment of Claims Against and Equity Interests in Oncor.

a. Unclassified Claims

Unclassified Claims consist of Administrative Expenses and Priority Tax
Claims, in accordance with section 1123(a)(1) of the Bankruptcy Code. Based on
its books and records and its projections for future expenses through the
Effective Date, Oncor presently estimates the amounts of such Claims as follows:

<PAGE>

Administrative Expenses, net of retainers $520,000.00

Priority Tax Claims $127,000.00

Final Fee Claims of professionals are subject to Bankruptcy Court
approval. However, certain Fee Claims have been paid, in whole or in part,
pursuant to orders already approved by the Bankruptcy Court(1). The estimate of
Administrative Expenses includes the projections for unpaid professional fees
and expenses incurred from the Petition Date through the Effective Date by:
Young Conaway Stargatt & Taylor, LLP (counsel for the Debtors); Brobeck, Phleger
& Harrison, LLP (the Debtors' special corporate and securities counsel); Arthur
Anderson, LLP (Oncor's auditors and tax advisors); Anderson Kill & Olick, P.C.
(co-counsel to Official Committee of Unsecured Creditors); Walsh, Monzack &
Monaco, P.A. (co-counsel to Committee of Official Unsecured Creditors); Susan
Airhart (technical advisor to Official Committee of Unsecured Creditors);
William W. MacDonald (Accounting Consultant); and John Tarcza (Patent Agent).
Oncor also recognizes that certain additional Administrative Expenses may be
incurred in continuing collection efforts and any additional mailings to
creditors.

The above estimates represent only those Administrative Expenses which
Oncor estimates will be incurred and remain unpaid on or before the Effective
Date. As the Plan provides for the retention and prosecution of estate causes of
action by the Post-Effective Date Committee and the Plan Agent after
confirmation, it is likely that the estate will incur significant legal and
accounting expenses after the Effective Date. Such expenses, which cannot be
estimated with any degree of certainty at this time, will be subject to the
review of the Bankruptcy Court, after notice to parties in interest.

The holder of any Administrative Expense other than (i) a Fee Claim,
(ii) a liability incurred and previously paid in the ordinary course of business
by Oncor, or (iii) an Allowed Administrative Expense, must file with the
Bankruptcy Court and serve on the Debtors, their counsel, and counsel for the
Committee, notice of such Administrative Expense within twenty (20) days after
the Effective Date. At a minimum, such notice must identify (i) the name of the
holder of such Administrative Expense, (ii) the amount of such Administrative
Expense, and (iii) the basis of such Administrative Expense. Failure to file
this notice timely and properly shall result in the Administrative Expense being
forever barred and discharged.

Each Person asserting an Administrative Expense that is a Fee Claim
incurred before the Effective Date shall be required to file with the Bankruptcy
Court, and serve on the Office of the United States Trustee, Debtors' counsel
and the Committee's counsel, a Fee Application within sixty (60) days after the
Effective Date. Failure to file a Fee Application timely shall result in the Fee
Claim being forever barred and discharged.

- -------------
(1) The Debtors estimate that total Fee Claims for these cases, net of
retainers, will be approximately $770,000. As of the date of this Disclosure
Statement, approximately $250,000 has been paid to professionals.

<PAGE>

An Administrative Expense with respect to which notice has been
properly filed pursuant to section 4.1(a) of the Oncor Plan shall become an
Allowed Administrative Expense if no Objection is filed within fifty (50) days
after the Effective Date. If an Objection is timely filed, the Administrative
Expense shall become an Allowed Administrative Expense only to the extent
Allowed by Final Order. An Administrative Expense that is a Fee Claim, and with
respect to which a Fee Application has been timely filed pursuant to section
4.1(b) of the Oncor Plan, shall become an Allowed Administrative Expense only to
the extent Allowed by Final Order.

Each holder of an Allowed Claim for an Administrative Expense shall
receive, on account of such claim, (i) the amount of such holder's Allowed Claim
in one Cash payment, as soon as practicable after the Initial Distribution Date,
or (ii) such lesser treatment to which the holder of such Administrative Expense
may agree in writing.

Each holder of an Allowed Priority Tax Claim shall receive, on account
of such claim, (a) the amount of such Allowed Claim in one Cash payment on or as
soon as practicable after the Initial Distribution Date; or (b) such lesser
treatment to which the holder of such Allowed Priority Tax Claim may agree in
writing.

2. CODON PLAN

The following table (Codon Classes of Claims and Equity Interests)
provides a summary of the classification and treatment under the Codon Plan of
Claims and Equity Interests. The Administrative Expenses and Priority Tax Claims
shown below constitute Codon's estimate of the amount of such Claims to be paid
in cash on or as soon as practicable after the Initial Distribution Date, taking
into account amounts paid or projected to be paid prior to that date. The total
amount of Claims shown below reflects Codon's current estimate of the likely
amount of such Claims, after the resolution by settlement or litigation of
Claims that Codon believes are subject to disallowance or reduction. Reference
should be made to the entire Disclosure Statement and to the Codon Plan for a
complete description of the classification and treatment of Claims and Equity
Interests.

a. Unclassified Claims

Unclassified Claims consist of Administrative Expenses and Priority Tax
Claims, in accordance with section 1123(a)(1) of the Bankruptcy Code. Based on
its books and records and its projections for future expenses through the
Effective Date, Codon presently estimates the amounts of such Claims as follows:

Administrative Expenses $ -0-

Priority Tax Claims $ -0-

The holder of any Administrative Expense other than (i) a liability
incurred and previously paid in the ordinary course of business by Codon, or
(ii) an Allowed

<PAGE>

Administrative Expense, must file with the Bankruptcy Court and serve on Codon
and its counsel, notice of such Administrative Expense within twenty (20) days
after the Effective Date. At a minimum, such notice must identify (i) the name
of the holder of such Administrative Expense, (ii) the amount of such
Administrative Expense, and (iii) the basis of such Administrative Expense.
Failure to file this notice timely and properly shall result in the
Administrative Expense being forever barred and discharged.

An Administrative Expense with respect to which notice has been
properly filed pursuant to section 4.1(a) of the Codon Plan shall become an
Allowed Administrative Expense if no objection is filed within fifty (50) days
after the Effective Date. If an objection is timely filed, the Administrative
Expense shall become an Allowed Administrative Expense only to the extent
Allowed by Final Order.

Each holder of an Allowed Priority Tax Claim, if any, shall receive, on
account of such claim, (a) the amount of such Allowed Claim in one Cash payment
on or as soon as practicable after the Initial Distribution Date; or (b) such
lesser treatment to which the holder of such Allowed Priority Tax Claim may
agree in writing.

C. Classified Claims and Equity Interests

The following are the Debtors' best estimates of the numbers and
amounts of classified Claims and Equity Interests to receive treatment under
their respective Plans. These estimates are based on an initial but incomplete
review of the Claims Register and the Debtors' books and records. The Debtors
have eliminated duplicative claims, and in instances where a timely filed proof
of claim is less than the scheduled amount, the Debtors have used the lower
number. The Debtors anticipate adjustments in the estimates set forth below may
be necessary after the Claim verification process is complete.

In many proofs of claim, the claimant seeks payment of amounts which
may fall into two or more classes. Often, it is impossible to determine, from
the face of the proof of claim, how the claim amount should be divided among
classes. In these instances, the Debtors have relied on the Debtors' books and
records with respect to the affected claimants. The figures set forth below
represent the Debtors' best estimate at this time regarding allowable Claims and
Equity Interests in each class. Holders should be advised, however, that the
actual allowed amounts may vary significantly from the estimates provided below.

<PAGE>

ONCOR

=========================================================================================================
Treatment of Classes of
Oncor Classes of Claims and Equity Claims and Equity Interests
Interests
=========================================================================================================
<S> <C>
Class O1: NTFC Capital Corp. Secured Claim Unimpaired.

Total Claims: $18,435.00(2) On or as soon as practicable after the Initial
Total Holders: 1 Distribution Date, NTFC Capital Corp. shall
receive Cash equal to the Deemed Collateral
Value of the Allowed NTFC Capital Corp.
Secured Claim.

Estimated Recovery: 100%
- ---------------------------------------------------------------------------------------------------------
Class O2: Other Priority Claims Unimpaired.

Total Claims: $12,600 On or as soon as practicable after the Initial
Total Holders: 3 Distribution Date, Allowed Other Priority
Claims shall receive Cash equal to the
amount of such Allowed Other Priority
Claim.

Estimated Recovery: 100%
- ---------------------------------------------------------------------------------------------------------
</TABLE>

- ----------
(2) Oncor continues to make monthly payments against the NTFC Capital
Corp. Secured Claim.

<PAGE>

Total Claims: $10,250,000(3) On or as soon as practicable after the Initial
Distribution Date, the holder of each Allowed
General Unsecured Claim shall receive a Pro
Total Holders: Approximately 400 Rata Share of the Distributable Cash, if any,
available after (a) all Allowed unclassified
Claims and all Allowed Claims in Classes O1
and O2 are paid in full and (b) the Contested
Claims Reserve is established for Contested
unclassified Claims and Contested Claims in
Classes O1 and O2. The Plan Agent may
make subsequent distributions to holders of
Allowed General Unsecured Claims in
accordance with the formula set forth in the
Plan Section 5.3, the timing of which
distributions shall be in the Plan Agent's sole
discretion.

Estimated Recovery: [46-93%](4)
- ---------------------------------------------------------------------------------------------------------
</TABLE>

- --------
(3) This estimate does not include a claim filed by Yale University for
$17,500,000 (the "Yale Claim"). Oncor believes that there is no basis for this
claim against Oncor.

(4) This is Oncor's best estimate of the range of recovery at this
time. The 46% recovery assumes that the Claims filed against Oncor (other than
the Yale Claim) will be allowed for the full value of filed proofs of Claim. The
93 % estimate assumes that claims will be allowed only in the amounts scheduled
by Oncor. It is impossible to predict the estimated recovery to any degree of
certainty until the Bankruptcy Court determines the amounts of Allowed Claims.

Total Claims: $8,970.000.00 The holders of Allowed Subordinated Promethean
Total Holders: Three Unsecured Claims, if any, will receive no
distributions under the Plan unless and until
after (a) all Allowed unclassified Claims and
Allowed Claims in Classes O1 through O3 are
paid in full and (b) the Contested Claims
Reserve is established for Contested
unclassified Claims and Contested Claims in
Classes O1 through O3. Thereafter, if
Distributable Cash is available after such
distributions and the establishment of such
reserve, the holder of each Allowed
Subordinated Promethean Unsecured Claim shall
receive a Pro Rata Share of such remaining
Distributable Cash.

Estimated Recovery: 0%
- ---------------------------------------------------------------------------------------------------------
Class O5: Equity Interests Impaired and deemed to reject the Plan.

Total Holders: Approximately 471 Each Holder of an Equity Interest shall not
receive any distribution under this Plan on
account of such Equity Interest, and such
Equity Interest shall be canceled on the
Effective Date.
=========================================================================================================
</TABLE>

<PAGE>

CODON
<TABLE>
<CAPTION>

=========================================================================================================
Treatment of Classes of
Codon Classes of Claims and Equity Claims and Equity Interests
Interests
=========================================================================================================
<S> <C>
Class C1: General Unsecured Claims Impaired.

Total Claims: $22,736.000 On or as soon as practicable after the Initial
Distribution Date, the holder of each Allowed
Total Holders: Approximately 150 General Unsecured Claim shall receive a Pro
Rata Share of the Distributable Cash, if any,
available after (a) payment in full of all
Allowed unclassified Claims and (b) the
Contested Claims Reserve is established for
Contested unclassified Claims and Contested
Claims in Class C1. The Plan Agent may
make subsequent distributions to holders of
Allowed General Unsecured Claims in
accordance with the formula set forth in the
Plan Section 5.5, the timing of which
distributions shall be in the Plan Agent's sole
discretion.

Estimated Recovery: 0 - 1%
- ----------------------------------------------------------------------------------------------------------
Class C2: Equity Interests Impaired and deemed to reject the Plan.

Total Holders: 1 Each Holder of an Equity Interest shall not
receive any distribution under this Plan on
account of such Equity Interest, and such
Equity Interest shall be canceled on the
Effective Date.
=========================================================================================================
</TABLE>

<PAGE>

V. HISTORY AND BUSINESS OF THE DEBTORS

A. Description of Businesses

As of February 26, 1999, (the "Petition Date"), Oncor and its
wholly-owned subsidiary Codon had disposed of a significant portion of their
assets and operations and had no revenues from operations. Their remaining
assets consist primarily of certain intellectual property, licenses and an
investment in marketable securities.

B. History

Oncor was incorporated in Maryland in July 1983. Since its inception,
Oncor developed, produced and marketed cancer-oriented genetic probes, related
reagents, molecular biology products, and diagnostic products. Oncor also
conducted preclinical studies for detection tests for certain leukemia, bladder
cancer, lung cancer and certain blood cancers. Oncor was also developing or
improving genetic test systems for the detection and management of significant
life-threatening cancers, including breast cancer, bladder cancer, lung cancer
and certain blood cancers. At the time that Oncor began disposing of its assets,
in addition to its genetic test systems, Oncor manufactured and marketed for
research purposes nearly 200 genetic probes to specific human genes, with
related reagents and instrumentation, and a wide variety of molecular biology
products to more than 1,700 customers worldwide..

Codon (formerly known as OncorPharm, Inc.) was incorporated in Delaware
on June 21, 1994 by Oncor to develop and commercialize therapeutic products
using Oncor's technologies in the field of genetic repair and drug delivery.
Codon performed research services for Oncor. Codon also undertook research
activities in an effort to develop gene-repair compounds and other genetic
therapies, based on technologies acquired, directly or indirectly, by exclusive
license from Princeton University, Yale University ("Yale") and Johns Hopkins
University ("JHU"). During 1995 and 1996, through a series of private equity
financing, Oncor's ownership interest was reduced to approximately 42%. In
February 1998, the Oncor acquired all remaining outstanding shares of Codon and
on October 1, 1998, Codon ceased all operations.

VI. THE CHAPTER 11 CASES

A. Factors Leading to Chapter 11 Filings

Oncor and Codon have not been profitable since their inception. The
Oncor and Codon business niche was highly competitive and was full of high risk
and high reward ventures. While Oncor and Codon enjoyed substantial standing in
the financial, academic and research communities, neither ever achieved
commercial success.

In June 1997, the Debtors entered into an agreement with Lehman
Brothers ("Lehman") as their sole and exclusive agent for the purpose of
providing financial advisory

<PAGE>

services that included identifying strategic opportunities to increase
stockholder value (including, without limitation, the sale of the Debtors),
advising the Debtors concerning opportunities for such strategic opportunities
or sales and, as requested, to participate on the Debtors' behalf in
negotiations concerning any such sales. The initial term of the agreement was
for one year, and the term was extended in May of 1998 for an additional three
months. Many contacts were made with potential purchasers, correspondence was
exchanged and presentations were made, but no sales were achieved through
Lehman's efforts.

As a result of continuing operating losses, settlement of costly
litigation, decreasing cash flow, inability to find a buyer, and inability to
raise additional capital, beginning in the second quarter of 1998, Oncor's
management began to reduce the scope of operations and ongoing operating
expenses by disposing of significant portions of its business and related
assets.

On April 9, 1998, Oncor completed a transaction with Vysis, Inc. in
which it conveyed to Vysis for $0.5 million in cash and full rights and title to
its non-oncology genetics probe assets ("Genetics Assets"), consisting primarily
of inventories and intellectual property, in exchange for two licenses to
patents owned or licensed to Vysis. (These two licenses were surrendered in the
November 24, 1998 transaction discussed below.) In addition, the parties settled
all legal action between them with respect to a suit brought by Vysis against
Oncor in September 1995.

On June 30, 1998, Oncor sold its research products assets, consisting
primarily of inventory, laboratory equipment and intellectual property, to
Intergen Company for cash consideration of $3.1 million.

On September 28, 1998, pursuant to a plan of merger between Oncormed,
Inc. and Gene Logic, Inc., Oncor exchanged all of its holdings of shares in
Oncormed for shares of common stock of Gene Logic, Inc.

On November 23, 1998, Oncor voluntarily surrendered assets related to
its in situ Hybridization business to certain of its secured creditors. Those
creditors contemporaneously sold these assets to Ventana Medical Systems.

On February 10, 1999, Oncor sold its 80% interest in Appligene Oncore,
a French company, to Quantum Biotechnologies for $1 million.

Following the sale of its interest in Appligene, Oncor's remaining
assets consisted of intellectual property, licenses and its investment in the
Gene Logic, Inc. common stock (presently 390,570 shares).

Oncor and Codon had no significant cash reserves, and their remaining
assets were not sufficient to meet their liabilities. In January 1999, Oncor's
Board of Directors engaged Mr. Joseph R. Shaya and his company to manage the
Oncor business as a consulting professional. As of February 25, 1999, Mr. Shaya
became the Acting Chief Executive Officer and President of Oncor and Codon.

<PAGE>

B. Commencement of the Chapter 11 Cases

On February 26, 1999, Oncor and Codon filed voluntary petitions for
relief under chapter 11 of the Bankruptcy Code. Pursuant to Bankruptcy Code
sections 1107 and 1108, the Debtors have continued to manage their assets as
debtors in possession. No trustee or examiner has been sought or appointed in
these cases. On April 19, 1999, the Office of the United States Trustee
appointed an Official Committee of Unsecured Creditors (the "Committee").

C. Significant Postpetition Events

1. Sales of Assets

a. License Agreements with JHU

From October of 1993 through March 31, 1996, Oncor entered into nine
license agreements with JHU, which provided Oncor the right to make, have made,
use, and/or sell all products and methodologies covered by certain patent rights
relating to technologies in the field of cancer research.

Pursuant to a letter of intent dated June 8, 1999, AstraZeneca
Diagnostics ("Zeneca") offered to pay $2.75 million (the "Zeneca Offer") for
seven of the licenses (the "JHU Licenses"). However, the Zeneca Offer was
contingent upon, inter alia, the completion of a due diligence review of the JHU
Licenses and other related documents and the entry into a collaborative research
agreement with JHU.

On June 30, 1999, Oncor filed a motion to approve the assumption, sale
and assignment of the JHU Licenses to Zeneca (the "Motion"), subject to higher
and better offers and contingent upon (i) the negotiation and execution of an
acceptable assignment and purchase agreement, and (ii) Court approval. A hearing
was scheduled for August 3, 1999 to consider the Motion. Prior to the hearing on
the Motion, Oncor received a competing bid from Virco, N.V. ("Virco") for the
JHU Licenses. To afford Oncor and the Committee an opportunity to further
evaluate the Zeneca Offer and the competing Virco offer, the Bankruptcy Court
adjourned the hearing to August 31, 1999.

Thereafter, Oncor and Virco continued their discussions and
negotiations concerning the sale and assignment of the JHU Licenses. Virco also
offered to pay $2.75 million for the JHU Licenses, and its offer was contingent
only upon Bankruptcy Court approval. Accordingly, on August 24, 1999, Oncor
filed an amended motion (the "Amended Motion"), pursuant to which Oncor sought
the entry of an order (i) approving the assumption of the JHU Licenses by Virco
for $2.75 million, pursuant to section 365(a) of the Bankruptcy Code, (ii)
approving, subject to higher and better offers, the sale and assignment of the
JHU Licenses, as well as the transfer of all clinical samples in Oncor's
possession which relate to the JHU Licenses, to Virco pursuant to sections
365(f) and 363 of the Bankruptcy Code,

<PAGE>

(iii) fixing the cure obligations under the JHU Licenses, and (iv) approving
certain bidding procedures. At a hearing conducted on August 31, 1999, the
Bankruptcy Court approved the Amended Motion. On September 9, 1999 the sale to
Virco closed.

b. Sunrise(TM) Properties

Sunrise(TM) Properties consists of Oncor's patent rights
related to the compounds (proprietary oligonucleotide primers), methods and
reagents for the simultaneous amplification and detection of DNA in a closed
tube format it previously markets under the trademark "Sunrise." The commercial
applications of the Sunrise(TM) Properties include assays, kits and reagents for
detecting genetic diseases (including cancer) and infectious diseases by
homogenous fluorescence detection of amplification of a target nucleic acid
sequence.

Pursuant to an August 10, 1999 offer letter, Intergen Company
("Intergen") agreed to pay $525,000 for the Sunrise(TM) Technologies. On August
13, 1999, Oncor filed a motion for approval of the sale of the Sunrise
Properties to Intergen, subject to higher and better offers, and to approve a
compromise settlement with Intergen (the "Intergen Motion"). The Intergen Motion
was also approved by the Bankruptcy Court on August 31, 1999.

As part of the sale of the Sunrise(TM) Properties, Oncor has
also agreed to transfer to Intergen all of Oncor's rights under and obligations
as licensor under a certain license agreement dated April 1, 1998 ( the "Becton
Agreement") between Oncor and Becton Dickinson and Company ("Becton"). Under the
Becton Agreement, Oncor granted Becton, among other things, a non-exclusive
license to certain of the technologies encompassed in the Sunrise(TM)
Properties.

Contingent upon the sale of the Sunrise(TM) Technologies,
Intergen further agreed to a settlement and compromise (the "Settlement and
Compromise") of its outstanding obligations under a prepetition agreement
between Oncor and Intergen. Under that agreement, Intergen is obligated to pay
to Oncor the sum $150,000 in monthly installments of $6,250 in consideration for
certain property rights previously obtained from Oncor. To date, Intergen has
paid $43,750. Pursuant to the Settlement and Compromise, Intergen agreed to pay
Oncor $75,000 in full and final satisfaction of all of its remaining obligations
under such agreement. On September 15, 1999, the sale to Intergen closed.

2. Litigation

a. RCAT Partners L.L.C.

Yale discovered Rolling Circle Amplification Technology
("RCAT"), an isothermal nucleic acid amplification system that allows for
accurate and sensitive detection of mutations in DNA and thus can be used to
detect not only forms of many diseases, but also the presence of infectious
disease agents such as viruses and bacteria.

<PAGE>

In order to develop applications for this technology, Yale
formed RCAT Partners L.L.C. ("RCAT Partners"), limited liability company
consisting of three members: Yale, Oncor and Molecular Staging Inc. ("MSI").
Pursuant to a License Agreement dated March 5, 1998, Yale licensed to RCAT
Partners the rights to RCAT patent applications. Under the License, RCAT
Partners received exclusive, worldwide rights relating to the RCAT Technology.
RCAT Partners sublicensed separately to Oncor and MSI the right to utilize the
RCAT patents in certain fields of use.

On May 10, 1999, RCAT Partners filed a motion (the "RCAT
Motion") seeking a declaratory judgment that the RCAT Partners' sublicense to
Oncor (the "Oncor Sublicense") was validly terminated pre-petition or, in the
alternative, seeking relief from the automatic stay. Although opposed by both
Oncor and the Committee, the Bankruptcy Court granted the RCAT Motion. The
parties agreed to extend the time for Oncor and the Committee to appeal that
decision, while the parties discussed a settlement.

On May 12, 1999, MSI and Yale commenced an adversary
proceeding (the "MSI/Yale Complaint") seeking a declaration that the operating
agreement forming RCAT Partners is null and void ab initio. On June 21, 1999
Oncor filed an answer to the MSI/Yale Complaint, denying the allegations therein
and asserting certain affirmative defenses and counterclaims. On July 12, 1999,
MSI and Yale filed a reply to the Oncor Counterclaims, denying the allegations
set forth therein, and asserting certain affirmative defenses thereto.

Ultimately, Oncor, RCAT Partners, Yale and MSI resolved their
dispute concerning the RCAT Motion and the MSI/Yale Complaint. On August 18,
1999, Oncor filed a motion for approval of such settlement (the "RCAT Settlement
Motion"), which provides for RCAT Partners, Yale and MSI to pay Oncor $700,000,
in exchange for Oncor's agreement to, inter alia, waive any and all of its
rights, title and interest to and in the RCAT Technology and to relinquish its
interest in RCAT Partners. The Bankruptcy Court approved the RCAT Settlement
Motion on August 31, 1999. On September 15, 1999, Oncor received the $700,000
settlement payment.

D. Other Assets of the Debtors

1. Gene Logic, Inc. Stock (Oncor)

As of the Petition Date, Oncor owned 390,573 shares of common stock of
Gene Logic Inc. ("Gene Logic"). Gene Logic's stock is publicly traded on the
NASDAQ exchange under the symbol GLGC. By Order dated October 1, 1999, the
Bankruptcy Court authorized Oncor to sell the Gene Logic stock at the best price
available. As of November 4, 1999, Oncor sold all of its shares of the Gene
Logic stock, at an average price of $6.55 per share, yielding a recovery of
$2.547 million.

2. Miscellaneous Assets

On September 29, 1999, Oncor filed a motion to sell certain
miscellaneous assets, including a substantial portion of its office furniture
and equipment and lab equipment to Virco for $27,500. The Debtors also currently
own certain miscellaneous assets which include bank accounts, intellectual
property, accounts receivables, general intangibles, and

<PAGE>

security deposits. Oncor believes the value of such tangible assets, other than
any causes of action which may be brought, is less than $50,000.

3. Codon Assets

On September 29, 1999, the Debtors filed a motion for approval
of the sale of certain Codon patents to AGI Dermatics, subject to higher and
better offers, for a cash payment of $25,000 plus additional milestone payments
to be received over time. Codon has received a competing offer for such patents
and is currently evaluating both offers. In addition, Codon maintains a bank
account in the amount of $22,000.

E. Assets Available for Distribution

Oncor's cash on hand in its bank accounts totals $6,000,000, which is
comprised of the proceeds of the asset sales described above. In addition, as
stated above, Oncor anticipates recovery of approximately an additional $50,000
from the sale of its miscellaneous tangible assets. After liquidation of Codon's
remaining patents, Codon believes it will have approximately $47,000 available
for distribution to its creditors.

F. Representation of the Debtors

The Debtors retained and have been represented in these Chapter 11
Cases by the law firm of Young Conaway Stargatt and Taylor, LLP ("Young
Conaway") as reorganization counsel, the law firm of Brobeck, Phleger &
Harrison, LLP ("Brobeck") as special corporate and securities counsel, and
Arthur Anderson, LLP as auditors and tax advisors.

G. The Committee

Following its formation on April 19, 1999 by the Office of the United
States Trustee, the Committee thereafter retained the law firms of Anderson Kill
& Olick, P.C. and Walsh, Monzack and Monaco, P.A. as its co-counsel. In
addition, the Committee retained Susan Airhart as its technical advisor.

H. Schedules and Bar Date

1. Setting of Bar Date and Filing of Schedules

The Bankruptcy Court set June 18, 1999 (the "Bar Date") as the general
bar date for filing proofs of claim on account of prepetition claims against the
Debtors. Individual notices were mailed to all known and scheduled creditors.
The Debtors are expected to vigorously prosecute objections to claims, as
appropriate, after an analysis of such claims.

Oncor has scheduled an aggregate of approximately $13,194,815 of
general unsecured claims and Codon has scheduled an aggregate of approximately
$4,396,288 of general unsecured claims.

<PAGE>

VII. SUMMARY OF THE PLANS OF REORGANIZATION

A. General

THE FOLLOWING IS A SUMMARY OF THE MATTERS CONTEMPLATED TO OCCUR EITHER
PURSUANT TO OR IN CONNECTION WITH THE CONSUMMATION OF THE PLANS. THIS SUMMARY
HIGHLIGHTS THE SUBSTANTIVE PROVISIONS OF THE PLANS AND IS NOT, NOR IS IT
INTENDED TO BE, A COMPLETE DESCRIPTION OR A SUBSTITUTE FOR A FULL AND COMPLETE
REVIEW OF THE PLANS.

The Plans classify the various Claims against and Equity Interest in
each of the Debtors. These classes take into account the different nature and
priority of Claims against and Equity Interests in the Debtors. In addition, in
accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative
Expenses and Priority Tax Claims are not classified for purposes of voting or
receiving distributions under either Plan. Rather, all such Claims are treated
separately under their respective Plan as unclassified Claims.

All classes of Claims other than Allowed Administrative
Expenses and Priority Tax Claims under the Codon Plan are impaired, and thus
entitled to vote on the Codon Plan. General Unsecured Claims and Subordinated
Promethean Claims under the Oncor Plan are impaired, and thus entitled to vote
on the Oncor Plan. Since Equity Interests of Oncor and Codon shall be canceled
under the Plans and are therefore deemed to reject the Plans, the Debtors are
not soliciting the votes of Holders of Equity Interests. See "Confirmation of
the Plans-Solicitation of Votes; Voting Procedures" below.

B. Classification and Treatment of Claims and Equity Interests

The Plans classify Claims and Equity Interests separately in accordance
with the requirements of the Bankruptcy Code and provide different treatment for
different Classes of Claims and Equity Interests. Only holders of Allowed Claims
are entitled to receive distributions under the Plans. Allowed Claims are Claims
that are not in dispute, are not contingent, are liquidated in amount, and are
not subject to objection or estimation. Initial distributions or other transfers
of Cash or other consideration specified in the Plan otherwise available to the
holders of Allowed Claims or Equity Interests will be made (a) on or as soon as
practicable after the Initial Distribution Date or (b) the date as soon as
practicable, but within thirty (30) days after the date on which a Contested
Claim becomes an Allowed Claim, as otherwise provided in the Plans, or as may be
ordered by the Bankruptcy Court.

Article II of each of the Plans classify the Claims and Equity
Interests of the respective Debtor. Articles IV and V of the Plans provide for
the treatment of Claims and Equity Interests. The following discussion
summarizes the classification scheme and treatment method proposed by and for
the Debtors and is qualified in its entirety by the terms of the Plans, which
are attached hereto as Exhibits A and B, and which you should read carefully in
considering whether to vote to accept or reject either Plan.

1. Oncor

<PAGE>

a. Unclassified Claims

i. Administrative Expenses

An Administrative Expense is any Claim arising after the Petition Date
and prior to the Effective Date constituting a cost or expense of administration
of the chapter 11 case allowed under subsections 503(b) and 507(a)(1) of the
Bankruptcy Code, including, without limitation, any actual and necessary
expenses of preserving the estate of Oncor, any actual and necessary expenses of
operating the business of Oncor, all compensation or reimbursement of expenses
to the extent allowed pursuant to sections 330 or 503 of the Bankruptcy Code,
and any fees or charges assessed against the estate of Oncor under section 1930,
chapter 123 of title 28 of the United States Code, and any Claim against Oncor
arising after the Petition Date and prior to the Effective Date.

The holder of any Administrative Expense against Oncor other than (i) a
Fee Claim, (ii) a liability incurred and previously paid in the ordinary course
of business by Oncor, or (iii) an Allowed Administrative Expense against Oncor,
must file with the Bankruptcy Court and serve on Oncor, its counsel and
Committee's counsel, notice of such Administrative Expense within twenty (20)
days after the Effective Date. At a minimum, such notice must identify (i) the
name of the holder of such Administrative Expense, (ii) the amount of such
Administrative Expense, and (iii) the basis of such Administrative Expense.
Failure to file this notice timely and properly shall result in the
Administrative Expense being forever barred and discharged.

Because the Debtors believe that substantially all of the Fee Claims
asserted in these cases will relate to services rendered for and on behalf of
Oncor, rather than Codon, all Fee Claims, to the extent approved by the
Bankruptcy Court, shall be paid by Oncor.

Each Person asserting an Administrative Expense against Oncor that is a
Fee Claim incurred before the Effective Date shall be required to file with the
Bankruptcy Court, and serve on the U. S. Trustee, Oncor's counsel and the
Committee's counsel, a Fee Application within sixty (60) days after the
Effective Date. Failure to file a Fee Application timely shall result in the Fee
Claim being forever barred and discharged.

An Administrative Expense with respect to which notice has been
properly filed pursuant to section 4.1(a) of the Oncor Plan shall become an
Allowed Administrative Expense if no objection is filed within fifty (50) days
after the Effective Date. If an objection is timely filed, the Administrative
Expense shall become an Allowed Administrative Expense only to the extent
Allowed by Final Order. An Administrative Expense that is a Fee Claim, and with
respect to which a Fee Application has been timely filed pursuant to section
4.1(b) of the Oncor Plan, shall become an Allowed Administrative Expense only to
the extent Allowed by Final Order.

Each holder of an Allowed Claim for an Administrative Expense against
Oncor shall receive, on account of such claim, (i) the amount of such Allowed
Administrative Expense in one Cash payment on or as soon as practicable after
the Initial Distribution Date, or (ii) such lesser treatment to which the holder
of such Administrative Expense may agree in writing.

<PAGE>

ii. Priority Tax Claims

A Priority Tax Claim is any Claim against Oncor that is entitled to
priority in accordance with section 507(a)(8) of the Bankruptcy Code. These
Claims consist of certain unsecured claims of governmental units for taxes. Each
holder of an Allowed Priority Tax Claim shall receive, on account of such Claim,
(a) the amount of such Allowed Claim in one Cash payment on or as soon as
practicable after the Initial Distribution Date; or (b) such lesser treatment to
which the holder of such Allowed Priority Tax Claim may agree in writing.

b. Classified Claims and Equity Interests

i. Class O1 - NTFC Capital Corp. Secured Claim

Class O1 consists of the Secured Claim of NTFC Capital Corp. Oncor
estimates that claims in this class will be approximately $18,435. On or as soon
as practicable after the Initial Distribution Date, NTFC Capital Corp. shall
receive a Cash distribution equal to the deemed collateral value of the Allowed
NTFC Capital Corp. Secured Claim.

Class O1 is unimpaired, is deemed to have accepted the Oncor Plan and,
accordingly, shall not be entitled to vote on the Oncor Plan.

ii. Class O2 - Other Priority Claims

Class O2 consists of the unsecured priority claims of three
former employees or officers of Oncor, entitled to priority in accordance with
section 507(a) of the Bankruptcy Code for wages earned within 90 days before the
Petition Date up to $4,300 per employee. On or as soon as practicable after the
Initial Distribution Date, the holders of Allowed Class 02 Claims shall receive
Cash distributions equal to their Allowed Other Priority Claims .

Class O2 is unimpaired, is deemed to have accepted the Oncor Plan and,
accordingly, shall not be entitled to vote on the Oncor Plan.

iii. Class O3 - General Unsecured Claims

Class O3 consists of the holders of general unsecured
obligations of Oncor. Oncor estimates that the claims in Class O3 will be
approximately $10.25 million(5). The holder of each Allowed General Unsecured
Claim against Oncor shall receive a Pro Rata Share of the Distributable Cash, if
any, on or as soon as practicable after the Initial Distribution Date, available
after (a) payment in full of all Allowed unclassified Claims and all Allowed
Claims in Classes O1 and O2 and (b) the Contested Claims Reserve has been
established for Contested unclassified Claims and Contested Claims in Classes 1
and 2. The Plan Agent will make subsequent distributions to holders of Allowed
General Unsecured Claims, the timing of which shall be in the discretion of the
Post-Effective Date Committee.

- ----------------
(5) This estimate does not include a claim filed by Yale University for
$17,500,000. Oncor believes that there is no basis for this claim against Oncor.

<PAGE>

Class O3 is impaired and is therefore entitled to vote on the Plan.

iv. Class O4 - Subordinated Promethean Unsecured
Claims

Class O4 consists of Subordinated Promethean Unsecured Claims.
The Debtors estimate that the claims in Class O4 will be approximately $8.554
million. The holders of Allowed Subordinated Promethean Unsecured Claims against
Oncor, if any, will receive no distributions under the Plan unless and until
after (a) all Allowed unclassified Claims and Allowed Claims in Classes O1
through O3 are paid in full and (b) the Contested Claims Reserve is established
for all Contested unclassified Claims and Contested Claims in Classes O1 through
O3. Thereafter, if Distributable Cash is available after such distributions of
such reserve, the holder of each Allowed Subordinated Promethean Unsecured Claim
shall receive, if any, a Pro Rata Share of such remaining Distributable Cash.

Class O4 is impaired and is therefore entitled to vote on the Plan.

v. Class O5 - Equity Interests

Class O5 consists of the claims of holders of Oncor preferred
and common stock. Each Holder of an Equity Interest shall not receive any
distribution under this Plan on account of such Equity Interest, and each such
Equity Interest shall be canceled on the Effective Date.

Because Class O5 is not receiving any consideration under the Plan, Class O5 is
impaired and is presumed to have rejected the Plan.

2. Codon Pharmaceuticals, Inc.

a. Unclassified Claims

i. Administrative Expenses

An Administrative Expense is any Claim arising after the Petition Date
and prior to the Effective Date constituting a cost or expense of administration
of the chapter 11 case allowed under subsections 503(b) and 507(a)(1) of the
Bankruptcy Code, including, without limitation, any actual and necessary
expenses of preserving the estate of Codon, any actual and necessary expenses of
operating the business of Codon, and any fees or charges assessed against the
estate of Codon under section 1930, chapter 123 of title 28 of the United States
Code, and any Claim against Codon arising after the Petition Date and prior to
the Effective Date.

The holder of any Administrative Expense against Codon other than (i) a
liability incurred and previously paid in the ordinary course of business by
Codon, or (ii) an Allowed Administrative Expense, must file with the Bankruptcy
Court and serve on Codon, its counsel and the Committee's counsel, notice of
such Administrative Expense within twenty (20) days after the Effective Date. At
a minimum, such notice must identify (i) the name of the holder of such
Administrative Expense, (ii) the amount of such Administrative Expense,

<PAGE>

and (iii) the basis of such Administrative Expense. Failure to file this notice
timely and properly shall result in the Administrative Expense being forever
barred and discharged.

Each holder of an Allowed Claim for an Administrative Expense against
Codon shall receive, on account of such claim, (i) the amount of such Allowed
Administrative Expense in one Cash payment on or as soon as practicable after
the Initial Distribution Date, or (ii) such lesser treatment to which the holder
of such Administrative Expense may agree in writing.

ii. Priority Tax Claims

A Priority Tax Claim is any Claim against Codon that is entitled to
priority in accordance with section 507(a)(8) of the Bankruptcy Code. These
Claims consist of certain unsecured claims of governmental units for taxes. Each
holder of an Allowed Priority Tax Claim shall receive, on account of such Claim,
(a) the amount of such Allowed Claim in one Cash payment on or as soon as
practicable after the Initial Distribution Date; or (b) such lesser treatment to
which the holder of such Allowed Priority Tax Claim may agree in writing.

b. Classified Claims and Equity Interests

i. Class C1 - General Unsecured Claims

Class C1 consists of the holders of general unsecured
obligations of Codon. Codon estimates that the claims in Class C1 will be
approximately $22.7 million. On or as soon as practicable after the Initial
Distribution Date, the holder of each Allowed General Unsecured Claim of Codon
shall receive a Pro Rata Share of the Distributable Cash, if any, available
after (a) payment in full of all Allowed unclassified Claims and (b) the
Contested Claims Reserve is established for Contested unclassified Claims.

Class C1 is impaired and is therefore entitled to vote on the Plan.

<PAGE>

ii. Class C2 - Equity Interests

Class C2 consists of the Equity Interest of Oncor in Codon.
Oncor shall not receive any distribution under this Plan on account of such
Equity Interest, and such Equity Interest shall be canceled on the Effective
Date.

Because Class C2 is not receiving any consideration under the Plan, Class C2 is
impaired and automatically presumed to have rejected the Plan.

C. Estimation of Amounts of Claims

The amounts of all Claims contained herein are estimated as of the date
of this Disclosure Statement. The Debtors have begun, but not completed, the
process of verifying proofs of Claim and reconciling the amounts sought therein
with their respective books and records. The Debtors anticipate that adjustments
in the estimates of the Claims set forth herein may be necessary after the Claim
verification process is completed.

D. Acceptance or Rejection of Plan

1. Classes Entitled to Vote

Each impaired Class of Claims shall be entitled to vote separately to
accept or to reject the Plan which affects their Claim. Any unimpaired Class of
Claims shall not be entitled to vote to accept or to reject either Plan. Under
the Codon Plan, General Unsecured Claims are impaired and therefore will be
solicited to vote on the Plan. Under the Oncor Plan, General Unsecured Claims
and Subordinated Promethean Claims are impaired and therefore will be solicited
to vote on the Oncor Plan. Equity Interests shall be canceled and thus are
deemed to have rejected the respective Plan.

2. Class Acceptance Requirement

A Class of Claims shall have accepted a respective Plan if it is
accepted by at least two-thirds (2/3) in amount and more than one-half (1/2) in
number of the Allowed Claims in such Class that have voted on that Plan. A Class
of Equity Interests shall have accepted a respective Plan if it is accepted by
at least two-thirds (2/3) of the number of the Allowed Equity Interests in such
Class that have actually voted on that Plan.

3. Cramdown

This section shall constitute the Debtors request, pursuant to section
1129(b)(1), that the Bankruptcy Court confirm their respective Plan
notwithstanding the fact that the requirements of section 1129(a)(8) may not be
met.

4. Cure Payments and Release of Liability

All cure payments, if any, which may be required by Bankruptcy Code
section 365(b)(1) under any executory contract or unexpired lease that is
assumed, or assumed and assigned, under the Plans shall be made by the
respective Debtor on the Initial Distribution Date; provided, however, in the
event of a dispute regarding the amount of any cure

<PAGE>

payments, the cure of any other defaults, the ability of such Debtor to provide
adequate assurance of future performance, or any other matter pertaining to
assumption or assignment, the specific Debtor liable for the cure payment shall
make such cure payments and cure such other defaults and provide adequate
assurance of future performance, all as may be required by Bankruptcy Code
section 365(b)(1), following the entry of a Final Order resolving such dispute.
To the extent that a party to an assumed executory contract or unexpired lease
has not filed an appropriate pleading with the Bankruptcy Court on or before the
thirtieth (30th) day after the Effective Date disputing the amount of any cure
payments offered to it by the affected Debtor, disputing the cure of any other
defaults, disputing the promptness of the cure payments, or disputing the
provisions of adequate assurance of future performance, then such party shall be
deemed to have waived its right to dispute such matters.

E. Means of Implementation of the Plan

1. Dissolution of Committee

On the Effective Date, the Committee shall be dissolved and its
members, professionals and agents shall be deemed released of their duties,
responsibilities, and obligations and shall be without further duties,
responsibilities, and authority in connection with the Debtors, these Chapter 11
Cases, the Plans, or their implementation.

2. Post-Effective Date Committee

A Post-Effective Date Committee shall be formed, created, and
constituted as of the Effective Date. The Post-Effective Date Committee shall
consist of two or three members of the Committee. The current members of the
Committee and a listing of the claims they assert are as follows:

o Saul Holdings Limited Partnership - $657,072.25 Claim
against Oncor
o VWR Corporation, d/b/a VWR Scientific Products -
$36,995.76 Claim against Oncor
o Alan R. Shuldiner - $61,333.00 Claim against Codon
o American Express Travel Related Services Co., Inc. -
$48,183.67 Claim against Oncor
o Bowne of New York City, Inc. - $43,833.25 Claim against
Oncor
o Don Schaaf & Friends, Inc. - $297,686.55 Claim against
Oncor
o Porter, Levay & Rose, Inc. - $37,086.78 Claim against
Oncor

The Members of the Post-Effective Date Committee shall be identified in a
notice to be filed with the Bankruptcy Court no later than twenty (20) days
before the Confirmation Hearing. The Post-Effective Date Committee shall
continue to exist to the extent necessary to effect the provisions of the Plans.
The Post-Effective Date Committee shall adopt such bylaws, if any, as they deem
appropriate, which shall provide for the governance of the Post-Effective Date
Committee, including respecting the appointment of substitute members. The Post-
Effective Committee shall be dissolved as soon as practicable after the earlier
of (a) payment in full of Claims, and (b) closing of the Chapter 11 Cases.

<PAGE>

3. Post-Effective Date Committee Compensation

The members of the Post-Effective Date Committee shall serve without
compensation, except that they shall be entitled to reimbursement of reasonable
out-of-pocket expenses by the Post Confirmation Debtors. The expenses of the
members of the Post-Effective Date Committee shall be paid upon the monthly
submission of bills to the Post-Confirmation Debtors and the members of the
Post-Effective Date Committee and paid from Distributable Cash if no objection
is received within five (5) business days following delivery of any bills. If
there is a dispute as to the amount of any bill, such dispute shall be submitted
to the Bankruptcy Court for determination of reasonableness. The Bankruptcy
Court will retain jurisdiction to resolve any dispute regarding the payment of
such expenses.

4. Retention of Professionals

The Post-Effective Date Committee shall have the right to retain the
services of attorneys, accountants, and other agents, including a Plan Agent
that, in the discretion of the Post-Effective Date Committee, are necessary to
assist the Post-Effective Date Committee in the performance of its duties. The
Plan Agent shall be retained by the Post-Effective Date Committee, as of the
Effective Date. The fees and expenses of such professionals shall be paid by the
Post-Confirmation Debtors from Distributable Cash upon approval by the
Bankruptcy Court, after notice to parties in interest. Except as otherwise
provided herein, no action of the Bankruptcy Court beyond entry of the
Confirmation Order shall be required with respect to actions by the
Post-Effective Date Committee regarding the retention of professionals or other
agents. Compensation to the Plan Agent shall be set forth in an agreement
between the Committee and the Plan Agent to be filed with the Bankruptcy Court
no later than ten (10) days before the Confirmation Hearing.

5. Powers and Duties of the Post-Effective Date Committee

The Post-Effective Date Committee shall have the powers, duties and
obligations specified in the Plan, which shall include the power to bring,
settle or decide not to bring, on behalf of the Post-Confirmation Debtors, all
Avoidance Actions and other causes of action held by the Debtors or their
estates; to object to and settle objections to Claims; to administer Cash on
Hand, make distributions to Persons with Allowed Claims in accordance with the
Plan and may, but is not required to, request approval of such distributions by
the Bankruptcy Court, and to undertake all other actions not inconsistent with
the Plans which the Post-Effective Date Committee deems reasonable, necessary
or desirable in connection with the administration of the Plans. The Debtors and
the Committee have not completed their review and analysis of (i) Claims to
which objections will be filed, and (ii) possible Avoidance Actions to be filed.
The Debtors estimate that the costs of objecting to Claims and prosecuting
Avoidance Actions shall be $250,000 to $500,000 and the Debtors shall reserve
$500,000 for these purposes. The Post-Confirmation Debtors and the
Post-Effective Date Committee may not spend more than $500,000 for these
purposes, unless the Bankruptcy Court authorizes such additional expenditures,
after notice to parties in interest. The Post-Effective Date Committee, in its
sole discretion, shall determine the number and timing of distributions on
account of Claims.

<PAGE>

6. Powers and Duties of the Plan Agent

The Plan Agent shall serve at the direction of the Post-Effective Date
Committee and shall be responsible for, inter alia, issuing checks to Creditors
and holders of Equity Interests in accordance with the Plan, maintaining the
books and records of the Post-Confirmation Debtors, preparing necessary tax
returns and post-confirmation reports to the United States Trustee and
undertaking any and all other administrative functions necessary to implement
the Plans.

7. Corporate Action

On the Effective Date and automatically and without further action, (i)
each existing member of the Board of Directors of the Debtors will resign or be
terminated and (ii) the Plan Agent shall be deemed sole shareholder, officer and
director of the Post-Confirmation Debtors.

8. Canceled Documents

As of the Effective Date, any security, note, instrument or other
document evidencing a Claim against or Equity Interest in the Debtors shall be
canceled, null and void, except for the right, if any, to receive a distribution
under these Plans and any Lien or security interest Allowed or arising under the
Plans.

9. Vesting of Assets

On the Effective Date, all right, title and interest in and to the
Assets shall vest in the Post-Confirmation Debtors, free and clear of any and
all Liens and other interests.

10. Assumption of Liabilities

On the Effective Date, the Post-Confirmation Debtors shall assume only
those liabilities pursuant to these Plans.

11. Winding Up Affairs

Following the Confirmation Date, the Debtors shall not engage in any
business activities or take any actions, except those necessary to effectuate
the Plans and wind up the affairs of the Debtors.

12. Maintenance, Safekeeping and Liquidation of Assets

Subject to the provisions of the Plans, the Post-Effective Date
Committee shall be responsible for management and distribution of the Assets and
shall conserve, protect, collect and liquidate or otherwise convert into cash
all assets that constitute part of the Assets and all other property incidental
thereto which may thereafter be acquired by the Post-Confirmation Debtors from
time to time under the Plans. To the end of accomplishing the purposes of the
Plans, the Post-Effective Date Committee, will have the right, power and
discretion to manage the affairs of the Post-Confirmation Debtors including, but
not limited to, having authority to consummate sales of Assets under such terms
and conditions as the

<PAGE>

Post-Effective Date Committee, in its sole discretion, deems appropriate to
carry out the purposes of the Plans. In that regard, the Post-Effective Date
Committee will exercise its reasonable business judgment in marketing the Assets
to insure the best marketing results. The Assets may be sold in any combination
or as a whole. Further, the Plan Agent, at the direction of the Post-Effective
Date Committee, may abandon any Assets if the Post- Effective Date Committee
determines that to do so is in the best interests of the Post-Confirmation
Debtors. Subject to the foregoing, the Post-Effective Date Committee shall have
the right and power to enter into any contracts or agreements binding the Post-
Confirmation Debtors and to execute, acknowledge and deliver any and all
instruments that are necessary, required or deemed by the Post-Effective Date
Committee to be advisable in connection with the performance of its duties or
appropriate for the final liquidation and distribution of the Assets.

13. Distributable Cash

All funds constituting Distributable Cash shall be collected by the
Plan Agent, and pending distribution, such funds shall be held in accounts or
otherwise invested in accordance with section 345 of the Bankruptcy Code or as
otherwise permitted by Final Order of the Bankruptcy Court. The Distributable
Cash will be held by the Plan Agent until it is distributed to any holder of an
Allowed Claim pursuant to the Plans.

14. Court Involvement or Supervision

No action of the Bankruptcy Court beyond entry of the Confirmation
Orders shall be required with respect to actions by the Post-Effective Date
Committee regarding the retention of professionals or other agents, except that
the payment of fees and costs for professionals shall be subject to Bankruptcy
Court approval after notice to parties in interest. Compensation to the Plan
Agent shall be disclosed in an agreement to be filed with the Bankruptcy Court
no later than twenty (20) days before the Confirmation Hearing.

15. Revocation

The Debtors reserve the right to revoke and withdraw the Plans before
the entry of the Confirmation Orders. If the Debtors revoke or withdraw the
Plans, or if confirmation of the Plans does not occur, then, with respect to the
Debtors, the Plans shall be deemed null and void and nothing contained therein
shall be deemed to constitute a waiver or release of any Claims by or against
the Debtors or any other Person or to prejudice in any manner the rights of the
Debtors or any other Person in any further proceedings involving the Debtors.

16. Record Keeping and Information

The Plan Agent shall keep records reflecting Distributable Cash, Cash
on Hand, payment of Allowed Claims, and documents concerning any litigation and
shall provide access to any Creditor or representative thereof during normal
business hours upon reasonable notice.

17. Payment of Post-Confirmation Quarterly Fees

<PAGE>

The Plan Agent on behalf of the Post-Confirmation Debtors, shall timely
pay from the Assets all fees incurred pursuant to 28 U.S.C. ss. 1930(a)(6) until
the Clerk of the Court closes the Chapter 11 Cases. The Plan Agent shall file
with the Court and serve on the United States Trustee a quarterly financial
report for each quarter (or portion thereof) that the case remains open until
the Clerk of the Court closes the Chapter 11 Cases.

18. Release of Liens

Except as otherwise provided in the Plan or in any contract, instrument
or other agreement or document created in connection with the Plan, on the
Effective Date, all mortgages, deeds of trust, liens or other security interests
against the property of the Debtors' estates shall be released, and all the
right, title and interest of any holder of such mortgages, deeds of trust, liens
or other security interests shall revert to the Debtors and their successors and
assigns.

F. Provisions Governing Distribution

1. Distributions

Any payment or distribution pursuant to the Plans, to the extent posted
in the United States Mail, shall be deemed made when deposited by the Plan Agent
into the United States Mail. Payments of Cash shall be made by check drawn on a
domestic bank or by wire transfer from a domestic bank. On or before the Initial
Distribution Date, distributions shall be made to holders of unclassified
administrative and priority Claims and Holders of Oncor Class 1 and 2 Claims.
Partial distributions to Holders of Allowed General Unsecured Claims shall also
be made on the Initial Distribution Date. The Plan Agent shall distribute all
Distributable Cash available after establishing the Contested Claims Reserve,
the Cash Reserve Fund of $500,000 for prosecuting Claim objections and Avoidance
Actions and $150,000 for post-confirmation administrative expenses, including,
inter alia, rent, utilities and accounting fees.

<PAGE>

2. Delivery of Distributions

Distributions and deliveries to holders of Allowed Claims shall be made
at the addresses set forth on the proofs of Claim (or at the last known
addresses of such holders if no proof of Claim is filed; or if the Debtors or
the Post-Confirmation Debtors have been notified of a change of address, at the
address set forth in such notice).

3. Time Bar to Cash Payments

Checks issued with respect to Allowed Claims shall be null and void if
not cashed within ninety (90) days of the mailing thereof. Requests for
reissuance of any check shall be made directly to the Plan Agent by the payee to
whom such check originally was issued. Any claim with respect to such a voided
check shall be made on or before the later of (i) the first anniversary of the
Initial Distribution Date or (ii) ninety (90) days after the mailing of such
check. After such date, all Claims with respect to void checks shall be
discharged and forever barred, and the amount of such checks shall become
Unclaimed Property. All Unclaimed Property shall revert to the estates for
distribution of an additional Pro Rata Share pursuant to the applicable Plan,
and the Claim of any other holder with respect to such Unclaimed Property shall
be discharged and forever barred.

4. De Minimis Distributions

No distribution of less than twenty-five dollars ($25) shall be made to
any holder of an Allowed Claim or Equity Interest. Such undistributed amount
will be retained by the Plan Agent to be distributed in accordance with the
applicable Plan.

5. No Interest Unless Otherwise Provided

No interest shall be paid on any Claim unless, and only to the extent
that, the applicable Plan specifically provides otherwise.

G. Procedures for Resolving and Treating Contested and Contingent Claims

1. Objection Deadline

Unless a different date is set by order of the Bankruptcy Court, all
objections to Claims, except Administrative Claims, shall be served and filed no
later than ninety (90) days after the Effective Date or ninety (90) days after a
particular proof of Claim is filed, whichever is later. Any proof of claim filed
more than thirty (30) days after the Effective Date shall be of no force and
effect, shall be deemed disallowed, and will not require Objection. All
Contested Claims shall be litigated to Final Order; provided, however, that the
Plan Agent, at the direction of the Post-Effective Date Committee may compromise
and settle any Contested Claim. Notwithstanding the foregoing, a Person who is
found to have received a voidable transfer shall have thirty (30) days following
the date upon which the order ruling that such transfer is avoidable becomes a
Final Order in which to file a Claim pursuant to section 502(h) of the
Bankruptcy Code in the amount of such avoided transfer.

<PAGE>

2. Responsibility for Objecting to Claims

Except as set forth below, only the Plan Agent, on behalf of the
Post-Confirmation Debtors and at the direction of the Post-Effective Date
Committee, may file Objections to Claims after the Effective Date of the Plans.
On or after ninety (90) days following the Effective Date, any party in interest
may request in writing that the Plan Agent file an Objection to any Claim. Such
request must include a detailed statement of the grounds for such Objection. If
the Plan Agent declines or fails to commence such Objection within thirty (30)
days after receipt of the written request therefor, the requesting party may
seek an order of the Bankruptcy Court granting such party standing to prosecute
such Objection for the benefit of the estate.

3. Administration of Contested Claims

a. No Distribution Pending Allowance

Notwithstanding any other provision of the Plans, no payment or
distribution shall be made with respect to any Contested Claim unless and until
such Contested Claim becomes an Allowed Claim.

b. Contested Claims Reserve

In determining the amount of distributions to be made under the Plans
to holders of Allowed Claims, the appropriate distributions required by the
Plans shall be made according to estimates and subject to the provisions of the
Plans. To protect the interests of holders of Contested Claims, a Contested
Claims Reserve shall be established under each of the Debtors' Plans. The
Post-Confirmation Debtors shall fund all Contested Claims Reserves for each
Contested Claim with Cash in an amount that represents the Pro Rata Share of the
Cash that would otherwise be distributed to the holder of each Contested Claim
if such Claim were Allowed in the amount set forth on the holder's Proof of
Claim or as estimated subject to Bankruptcy Court approval by the Post-Effective
Date Committee.

c. Distribution After Allowance

As soon as practicable after a Contested Claim becomes an Allowed
Claim, the holder of such an Allowed Claim shall receive from their Contested
Claims Reserve a distribution in an amount equal to the aggregate of all the
distributions which such holder would have received had such Contested Claim
been an Allowed Claim on the Effective Date. Distributions to each holder of a
Contested Claim, to the extent that such Claim becomes an Allowed Claim, shall
be made in accordance with the provisions of the respective Plan governing the
Class of Claims to which such Claim belongs.

d. Distribution After Disallowance

If and when a Contested Claim or any portion thereof becomes a
Disallowed Claim, the Pro Rata Share of the distributions to which each holder
of an Allowed Claim in the Class of Claims to which such Claim belongs is
entitled, subject to other Plan provisions, shall increase commensurately.
Accordingly, the Plan Agent, at the direction of the Post-Effective Date
Committee, shall have the right to make subsequent distributions.

<PAGE>

H. Executory Contracts and Leases

1. General Treatment: Rejected If Not Assumed

The Plans constitute and incorporate a motion by the Debtors to reject,
as of the Effective Date, all prepetition executory contracts and unexpired
leases to which the Debtors are a party, except for executory contracts or
unexpired leases that (a) have been assumed or rejected pursuant to Final Order
of the Bankruptcy Court, or (b) are the subject of a separate motion pursuant to
section 365 of the Bankruptcy Code to be filed and served by the Debtors before
the commencement of the Confirmation Hearing. All cure payments required to be
made with respect to unexpired leases and executory contracts assumed pursuant
to the Plans shall be made on or as soon as practicable after the Initial
Distribution Date.

2. Bar to Rejection Damages

If the rejection of an executory contract or an unexpired lease by the
Debtors results in damages to the other party or parties to such contract or
lease, a Claim for such damages shall be forever barred and shall not be
enforceable against the respective Debtor or its properties or agents,
successors, or assigns, unless a proof of Claim is filed with the Bankruptcy
Court and served upon the Post-Confirmation Debtor by the earlier of (a) thirty
(30) days after the Confirmation Date, or (b) such other deadline as the Court
may set for asserting a Claim for such damages.

3. Rejection Claims

Any Rejection Claim arising from the rejection of an unexpired lease or
executory contract not barred by section 10.2 of the Plans shall be treated as a
General Unsecured Claim pursuant to Article V of the Plans. Nothing contained
herein shall be deemed an admission by the Debtors that such rejection gives
rise to or results in a Claim or shall be deemed a waiver by the Debtors of any
objections to such Claim if asserted.

I. Maintenance of Causes of Action

Unless expressly waived or released, each Post-Confirmation Debtor
shall retain any cause of action belonging to their respective estates pursuant
to section 541 of the Bankruptcy Code, including but not limited to the
Avoidance Actions, and any other avoidance or recovery actions under chapter 5
of the Bankruptcy Code, and may litigate rights to payments, or Claims that may
belong or have belonged to either of the Debtors. Persons subject to a
successful Avoidance Action may file a Claim, as appropriate, within the time
described in section 9.1 of the Plan.

J. Conditions Precedent to Effectiveness of Plan

The Effective Date of the respective Plans shall not occur unless and
until the following conditions shall have been satisfied or waived by the
respective Debtor, as determined in its sole discretion, in consultation with
the Committee: (a) the Confirmation Order shall have been entered in a form
satisfactory to that Debtor, and (b) the Confirmation Order shall have become a
Final Order.

<PAGE>

K. Consummation of the Plan

1. Retention of Jurisdiction

Pursuant to sections 1334 and 157 of title 28 of the United States
Code, the Bankruptcy Court shall retain exclusive jurisdiction of all matters
arising in, arising under, and related to each of the Debtor's individual
chapter 11 case and their Plan, for the purposes of sections 105(a) and 1142 of
the Bankruptcy Code, and for, among other things, the following purposes:

(i) To hear and to determine any and all objections to or
applications concerning the allowance of Claims or the
allowance, classification, priority, compromise, estimation,
or payment of any Administrative Expense, Claim, or Equity
Interest;

(ii) To hear and determine any and all applications for payment of
Fee Claims, or for payment of any other fees or expenses
authorized to be paid or reimbursed from the respective
Debtor's estate under the Bankruptcy Code, and any and all
objections thereto;

(iii) To hear and determine pending applications for the rejection,
assumption, or assumption and assignment of unexpired leases
and executory contracts and the allowance of Claims resulting
therefrom, and to determine the rights of any party in respect
of the assumption or rejection of any executory contract or
lease;

(iv) To hear and determine any and all adversary proceedings,
applications, or contested matters, including any remands from
any appeals;

(v) To hear and to determine all controversies, disputes, and
suits which may arise in connection with the execution,
interpretation, implementation, consummation, or enforcement
of either of the Plans or in connection with the enforcement
of any remedies made available under either of the Plans;

(vi) To liquidate any disputed, contingent, or unliquidated Claims
or to estimate any Contested Claims;

(vii) To ensure that distributions to holders of Allowed Claims are
accomplished as provided herein;

(viii) To enter and to implement such orders as may be appropriate in
the event the Confirmation Order is for any reason stayed,
reversed, revoked, modified, or vacated;

(ix) To enable the Plan Agent and the Post-Effective Date Committee
to prosecute any and all proceedings which may be brought to
set aside liens or encumbrances and to recover any transfers,
assets, properties or damages to which the Post-Confirmation
Debtors may be entitled under applicable provisions of the
Bankruptcy Code or any other federal, state or local laws,

<PAGE>

including causes of action, controversies, disputes and
conflicts between the Debtors and any other party, including
but not limited to, any causes of action or objections to
Claims, preferences or fraudulent transfers and obligations or
equitable subordination;

(x) To consider any modification of either of the Plans pursuant
to section 1127 of the Bankruptcy Code, to cure any defect or
omission, or to reconcile any inconsistency in any order of
the Bankruptcy Court, including, without limitation, the
Confirmation Order;

(xi) To enter and to implement such orders as may be necessary or
appropriate to execute, interpret, implement, consummate, or
to enforce the terms and conditions of the Plans and the
transactions contemplated thereunder;

(xii) To hear and to determine any other matter not inconsistent
with the Bankruptcy Code and title 28 of the United States
Code that may arise in connection with or related to the
Plans; and

(xiii) To enter final decrees closing these Chapter 11 Cases.

2. Abstention and Other Courts

If the Bankruptcy Court abstains from exercising, or declines to
exercise, jurisdiction or is otherwise without jurisdiction over any matter
arising out of or relating to these Chapter 11 Cases, section XIII of the Plans
shall have no effect upon and shall not control, prohibit, or limit the exercise
of jurisdiction by any other court having competent jurisdiction with respect to
such matter.

3. Nonmaterial Modifications

The Debtors may, with the approval of the Bankruptcy Court and in
consultation with the Committee, but without notice to all holders of Claims and
Equity Interests, correct any nonmaterial defect, omission, or inconsistency in
their respective Plan in such manner and to such extent as may be necessary or
desirable. The Debtors, in consultation with the Committee, may undertake such
nonmaterial modification pursuant to this section insofar as it does not
adversely change the treatment of the Claim of any Creditor or the interest of
any Equity Interest holder who has not accepted in writing the modification.

4. Material Modifications

The Debtors, in consultation with the Committee, may propose
modifications of their respective Plan in writing at any time before
confirmation, provided that such Plan, as modified, meets the requirements of
sections 1122 and 1123 of the Bankruptcy Code, and such Debtor shall have
complied with section 1125 of the Bankruptcy Code. The Plans may be modified at
any time after confirmation and before the Initial Distribution Date, provided
that such Plan, as modified, meets the requirements of sections 1122 and 1123 of
the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing,
confirms such Plan, as modified, under section 1129 of the Bankruptcy Code, and
the circumstances warrant such modification.

<PAGE>

L. Limitation of Liability, Releases and Injunction

1. Exculpations

Neither the Debtors, the Committee or its members, the
Post-Effective Date Committee or its members, the Plan Agent, nor any of their
respective officers, directors, partners, employees, agents, or professionals
(collectively, the "Exculpated Parties") shall have or incur any liability to
any holder of a Claim or Equity Interest for any act, event, or omission in
connection with, or arising out of, the Chapter 11 Cases, the confirmation of
the Plans, the consummation of the Plans, or the administration of the Plans,
except for an act, event, or omission constituting willful misconduct. In any
action, suit or proceeding by any holder of a Claim or Equity Interest or other
party in interest contesting any action by, or nonaction of, an Exculpated Party
as not being in good faith, the reasonable attorneys' fees and costs of the
prevailing party shall be paid by the losing party. As a condition of going
forward with such action, suit, or proceeding at the outset thereof, the
party(s) bringing the action shall be required to provide appropriate proof and
assurances of their capacity to make such payments of reasonable attorneys' fees
and costs in the event they fail to prevail. Nothing in this paragraph should be
construed as a limitation of liability for actions arising prior to the Petition
Date.

2. Limited Release

On the Effective Date, each Debtor shall, on behalf of itself
and subsidiary or affiliate, hereby release the officers and directors of such
companies holding office at any time after the applicable Petition Date and its
and their respective agents, employees, advisors, and representatives from any
and all claims or liability arising from post-petition actions taken in their
respective capacities described above.

3. Injunction

As of the Confirmation Date, except as provided in the Plans
or the Confirmation Order, all Persons that have held, currently hold or may
hold a Claim or other debt or liability that is treated pursuant to the terms of
the Plan are enjoined from taking any of the following actions on account of any
such discharged Claims, debts or liabilities, other than actions brought to
enforce any rights or obligations under the Plans against the Debtors or the
Post-Confirmation Debtors or their property: (i) commencing or continuing in any
manner any action or other proceeding; (ii) enforcing, attaching, collecting or
recovering in any manner any judgment, award, decree or order; (iii) creating,
perfecting or enforcing any lien or encumbrance; (iv) asserting a setoff, right
of subrogation or recoupment of any kind against any debt, liability or
obligation; and (v) commencing or continuing, in any manner or in any place, any
action that does not comply with or is inconsistent with the provisions of the
Plans or the Confirmation Order. This injunction shall remain in full force and
effect until the Post-Effective Date Committee makes its final distribution to
Creditors under the Plans, except that, in the event that Oncor Class 3 Claims
are paid in full pursuant to the Oncor Plan, such injunction shall continue in
full force and effect thereafter with respect to such paid Claims.

<PAGE>

M. Miscellaneous Provisions

1. Severability

Should the Bankruptcy Court determine that any provisions of either of
the Plans are unenforceable either on its face or as applied to any Claim or
Equity Interest or transaction, the Debtors, in consultation with the Committee,
may modify their respective Plan in accordance with section 13.3 or 13.4 of such
Plan, as applicable, so that such provisions shall not be applicable to the
holder of any Claim or Equity Interest.

2. Setoffs

Each Debtor may, but shall not be required to, set off against any
Claim and the payments or other distributions to be made pursuant to their Plan
with respect to such Claim, claims of any nature whatsoever the Debtor may have
against the holder of such Claim, but neither the failure to do so nor the
allowance of any Claim hereunder shall constitute a waiver or release by the
Debtor of any such claim that the Debtor may have against such holder.

3. Compliance with All Applicable Laws

If notified by any governmental authority that they are in violation of
any applicable law, rule, regulation, or order of such governmental authority
relating to its businesses, the Debtors shall comply with such law, rule,
regulation, or order; provided that nothing contained herein shall require such
compliance if the legality or applicability of any such requirement is being
contested in good faith in appropriate proceedings and, if appropriate, an
adequate reserve has been set aside on the books of the Debtors.

4. Binding Effect

The Plans shall be binding upon, and shall inure to the benefit of, its
respective Debtor, the holders of the Claims, the holders of Equity Interests,
and such persons' respective successors and assigns.

5. Governing Law

Unless a rule of law or procedure supplied by federal law (including
the Bankruptcy Code and Bankruptcy Rules) is applicable, or a specific choice of
law provision is provided, the internal laws of the State of Delaware shall
govern the construction and implementation of the Plans and any agreements,
documents, and instruments executed in connection with the Plans, without regard
to conflicts of law.

6. Payment of Statutory Fees

All fees payable pursuant to section 1930 of title 28 of the United
States Code, as determined by the Bankruptcy Court at the Confirmation Hearing,
shall be paid on or before the Effective Date.

<PAGE>

7. Timing of Distributions

Any payment or distribution required to be made hereunder on a day
other than a Business Day shall be due and payable on the next succeeding
Business Day.

VIII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN

The following discussion is a summary of certain federal income tax
aspects of the Plans for general information only. It should not be relied upon
for purposes of determining the specific tax consequences of either Plan with
respect to a particular holder of a Claim or Equity Interest. This discussion
does not purport to be a complete analysis or listing of all potential tax
issues.

The following discussion is based upon existing provisions of the
Internal Revenue Code (the "IRC"), existing regulations thereunder, and current
administrative rulings and court decisions. No assurance can be given that
legislative or administrative changes or court decisions may not be forthcoming
which would require significant modification of the statements expressed in this
section. Moreover, the tax consequences to holders of Claims and Equity
Interests may vary based upon the individual tax circumstances of each such
holder. Nothing herein purports to describe any state, local, or foreign tax
consequences.

NO RULING HAS BEEN SOUGHT OR OBTAINED FROM THE INTERNAL REVENUE SERVICE
(THE "IRS") WITH RESPECT TO ANY OF THE TAX ASPECTS OF EITHER PLAN AND NO OPINION
OF COUNSEL HAS BEEN OBTAINED BY EITHER DEBTOR WITH RESPECT THERETO. NO
REPRESENTATION OR ASSURANCE IS BEING MADE WITH RESPECT TO THE FEDERAL INCOME TAX
CONSEQUENCES AS DESCRIBED HEREIN. CERTAIN TYPES OF CLAIMANTS AND INTEREST
HOLDERS MAY BE SUBJECT TO SPECIAL RULES NOT ADDRESSED IN THIS SUMMARY OF FEDERAL
INCOME TAX CONSEQUENCES. THERE MAY ALSO BE STATE, LOCAL, OR FOREIGN TAX
CONSIDERATIONS APPLICABLE TO EACH HOLDER OF A CLAIM OR EQUITY INTEREST WHICH ARE
NOT ADDRESSED HEREIN. EACH HOLDER OF A CLAIM OR EQUITY INTEREST AFFECTED BY
EITHER PLAN MUST CONSULT AND RELY UPON SUCH HOLDER'S OWN TAX ADVISOR REGARDING
THE SPECIFIC TAX CONSEQUENCES OF THE PLAN WITH RESPECT TO SUCH HOLDER'S CLAIM OR
EQUITY INTEREST. THIS INFORMATION MAY NOT BE USED OR QUOTED IN WHOLE OR IN PART
IN CONNECTION WITH THE OFFERING FOR SALE OF SECURITIES.

A creditor who receives Cash or other consideration in satisfaction of
any Claim may recognize ordinary income. The impact of such ordinary income, as
well as the tax year for which the income will be recognized, will depend upon
each creditor's individual circumstances, including the nature and manner of
organization of the creditor, the creditor's applicable tax bracket, and the
creditor's taxable year. Each creditor is urged to consult with its tax advisor
regarding the tax implications of any distributions under either of the Plans.

<PAGE>

THE FOREGOING IS INTENDED TO BE A SUMMARY ONLY. IT IS NOT A SUBSTITUTE
FOR CAREFUL TAX PLANNING OR CONSULTATION WITH A TAX ADVISOR. THE
FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF THE PLAN ARE
COMPLEX AND, IN SOME CASES, UNCERTAIN. SUCH CONSEQUENCES MAY ALSO VARY
BASED UPON THE INDIVIDUAL CIRCUMSTANCES OF EACH HOLDER OF A CLAIM OR
EQUITY INTEREST. ACCORDINGLY, EACH HOLDER OF A CLAIM OR EQUITY INTEREST
IS STRONGLY URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR REGARDING
THE FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES OF THE PLANS.

IX. SELECTED FINANCIAL INFORMATION

Attached hereto as Exhibit C is a copy of Oncor's most recent form 10-Q
filed with the Securities Exchange Commission.

Oncor's 1998 Annual Report on Form 10-K filed with the Securities
Exchange Commission is attached as Exhibit D.

X. CONFIRMATION OF THE PLANS

A. Solicitation of Votes; Voting Procedures

1. Ballots and Voting Deadlines

A separate ballot to be used for voting to accept or reject each Plan,
together with a postage-paid return envelope, is enclosed with all copies of
this Disclosure Statement mailed to all holders of Claims entitled to vote.
BEFORE COMPLETING YOUR BALLOT, PLEASE READ CAREFULLY THE INSTRUCTION SHEET THAT
ACCOMPANIES THE BALLOT.

The Bankruptcy Court has directed that, in order to be counted for
voting purposes, ballots for the acceptance or rejection of the Plans must be
received no later than 4:00 p.m., Eastern Time, on December 30, 1999, at the
following address:

Oncor, Inc.
15200 Shady Grove Road
Suite 350
Rockville, MD 20850
ATTN: Donald Capretta

YOUR BALLOT MAY NOT BE COUNTED IF IT IS RECEIVED AT THE ABOVE ADDRESS AFTER 4:00
P.M., EASTERN TIME, ON DECEMBER 30, 1999.

2. Parties in Interest Entitled to Vote

<PAGE>

Any holder of a Claim against either Debtor at the date on which the
order is entered approving the Disclosure Statement whose Claim has not
previously been disallowed by the Bankruptcy Court is entitled to vote to accept
or reject the Plan or Plans to which they have a Claim, if such Claim is
impaired under the Plan and either (i) such holder's Claim has been scheduled by
the Debtor (and such Claim is not scheduled as disputed, contingent, or
unliquidated) or (ii) such holder has filed a proof of claim on or before June
18, 1999, the last date set by the Bankruptcy Court for such filings. Any Claim
as to which an objection has been filed is not entitled to vote, unless the
Bankruptcy Court, upon application of the holder to whose Claim an objection has
been made, temporarily allows such Claim in an amount that it deems proper for
the purpose of accepting or rejecting the Plan of the Debtor they have a claim
against. Any such application must be heard and determined by the Bankruptcy
Court on or before commencement of the Confirmation Hearing. A vote may be
disregarded if the Bankruptcy Court determines, after notice and a hearing, that
such vote was not solicited or procured in good faith or in accordance with the
provisions of the Bankruptcy Code.

IF YOU HAVE ANY QUESTIONS REGARDING THE PROCEDURES
FOR VOTING ON EITHER PLAN, PLEASE CONTACT THE DEBTORS'
COUNSEL AS FOLLOWS:

Pauline K. Morgan
Edwin J. Harron
Young Conaway Stargatt & Taylor, LLP
11th Floor Rodney Square North
P.O. Box 391
Wilmington, DE 19899-0391
(302) 571-6600

3. Definition of Impairment

As set forth in section 1124 of the Bankruptcy Code, a class of claims
or equity interests is impaired under a plan of reorganization unless, with
respect to each claim or equity interest of such class, the plan:

(a) leaves unaltered the legal, equitable, and contractual
rights of the holder of such claim or equity interest; or

(b) notwithstanding any contractual provision or applicable
law that entitles the holder of a claim or equity interest to demand or
receive accelerated payment of such claim or equity interest after the
occurrence of a default:

i) cures any such default that occurred before or
after the commencement of the case under the Bankruptcy Code,
other than a default of a kind specified in section 365(b)(2)
of the Bankruptcy Code;

ii) reinstates the maturity of such claim or interest
as it existed before such default;

<PAGE>

iii) compensates the holder of such claim or interest
for any damages incurred as a result of any reasonable
reliance on such contractual provision or such applicable law;
and

iv) does not otherwise alter the legal, equitable or
contractual rights to which such claim or interest entitles
the holder of such claim or interest.

4. Classes Impaired Under the Plan

All holders of Impaired Claims are entitled to vote to accept or reject
the Plan of the Debtor against whom such impaired Claim is asserted. Since
Equity Interests are to be canceled under the Plans, the Holders of Equity
Interests are presumed to reject the Plans and accordingly, are not being
solicited to vote.

5. Vote Required for Class Acceptance

The Bankruptcy Code defines acceptance of a plan by a class of claims
as acceptance by holders of at least two-thirds in dollar amount, and more than
one-half in number, of the claims of that class which actually cast ballots for
acceptance or rejection of the plan. Thus, class acceptance takes place only if
at least two-thirds in amount and a majority in number of the holders of claims
voting cast their ballots in favor of acceptance.

B. Confirmation Hearing

Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court,
after notice, to hold a hearing on confirmation of a plan. By order of the
Bankruptcy Court, the Confirmation Hearing has been scheduled for January 12,
2000, at 12:30 p.m., Eastern Time, in the Courtroom of the Honorable Joseph J.
Farnan, Jr., Chief United States District Court Judge, 844 King Street,
Wilmington, DE 19801. The Confirmation Hearing may be adjourned from time to
time by the Bankruptcy Court without further notice except for an announcement
made at the confirmation hearing or any adjournment thereof.

Section 1128(b) of the Bankruptcy Code provides that any party in
interest may object to confirmation of a plan. Any objection to confirmation of
either of the Plans must be made in writing and filed with the Bankruptcy Court
on or before December 30, 1999, at the following address:

Office of the Clerk
U.S. Bankruptcy Court
Federal Building
844 Market Street
Wilmington, Delaware 19801

In addition, any such objection must be served upon the following parties on or
before 4:00 p.m., Eastern Time, on December 30, 1999:

<PAGE>

Anderson Kill & Olick, P.C. Young Conaway Stargatt & Taylor, LLP
Attn: Thomas Kent, Esq. Attention: Pauline K. Morgan, Esq.
1251 Avenue of the Americas 11th Floor, Rodney Square North
New York, NY 10020 P. O. Box 391
Wilmington, Delaware 19899-0391
Walsh, Monzack & Monaco, P.A.
Attn: Francis A. Monaco, Jr., Esq. Office of the United States Trustee
1201 Orange Street Attn: Maria Giannirakis, Esquire
P. O. Box 2031 601 Walnut Street, Curtis Center
Wilmington, DE 19899-2031 Suite 950 West
Philadelphia, PA 19106

Objections to confirmation of either Plan are governed by Bankruptcy
Rule 9014. UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED AND FILED, IT
WILL NOT BE CONSIDERED BY THE BANKRUPTCY COURT.

C. Requirements for Confirmation of the Plans

At the Confirmation Hearing, the Bankruptcy Court must determine
whether the Bankruptcy Code's requirements for confirmation of each Plan has
been satisfied, in which event the Bankruptcy Court will enter an order
confirming the Plan for which such requirements have been satisfied. As set
forth in section 1129 of the Bankruptcy Code, these requirements are as follows:

1. The plan complies with the applicable provisions of the
Bankruptcy Code.

2. The proponent of the plan complied with the applicable
provisions of the Bankruptcy Code.

3. The plan has been proposed in good faith and not by any means
forbidden by law.

4. Any payment made or promised by the debtor, by the plan
proponents, or by a person issuing securities or acquiring
property under the plan, for services or for costs and
expenses in, or in connection with, the case, or in connection
with the plan and incident to the case, has been approved by,
or is subject to the approval of the Bankruptcy Court as
reasonable.

5. (a) (i) The proponent of the plan has disclosed the identity
and affiliations of any individual proposed to serve, after
confirmation of the plan, as a director, officer, or voting
trustee of the debtor, an affiliate of the debtor
participating in a joint plan with the debtor, or a successor
to the debtor under the plan; and

(ii) the appointment to, or continuance in, such
office of such individual, is consistent with the interests of
creditors and equity security holders and with public policy;
and

<PAGE>

(b) the proponent of the plan has disclosed the identity of
any insider that will be employed or retained by the
Post-Confirmation debtor, and the nature of any compensation
for such insider.

6. Any governmental regulatory commission with jurisdiction,
after confirmation of the plan, over the rates of the debtor
has approved any rate change provided for in the plan, or such
rate change is expressly conditioned on such approval.

7. With respect to each impaired class of claims or interests:

(a) each holder of a claim or interest of such class has
accepted the plan or will receive or retain under the plan on
account of such claim or interest property of a value, as of
the effective date of the plan, that is not less than the
amount that such holder would so receive or retain if the
debtor was liquidated on such date under chapter 7 of the
Bankruptcy Code on such date; or

(b) if section 1111(b)(2) of the Bankruptcy Code applies to
the claims of such class, the holder of a claim of such class
will receive or retain under the plan on account of such claim
property of a value, as of the effective date of the plan,
that is not less than the value of such holder's interest in
the estate's interest in the property that secures such
claims.

8. With respect to each class of claims or interests:

(a) such class has accepted the plan; or

(b) such class is not impaired under the plan.

9. Except to the extent that the holder of a particular claim has
agreed to a different treatment of such claim, the plan
provides that:

(a) with respect to a claim of a kind specified in section
507(a)(1) or 507(a)(2) of the Bankruptcy Code, on the
effective date of the plan, the holder of such claim will
receive on account of such claim cash equal to the allowed
amount of such claim;

(b) with respect to a class of claims of a kind specified in
section 507(a)(3), 507(a)(4), 507(a)(5) or 507(a)(6) of the
Bankruptcy Code, each holder of a claim of such class will
receive:

(i) if such class has accepted the plan,
deferred cash payments of a value, as of the
effective date of the plan, equal to the
allowed amount of such claim; or

(ii) if such class has not accepted the plan,
cash on the effective date of the plan equal
to the allowed amount of such claim; and

<PAGE>

(c) with respect to a claim of a kind specified in section
507(a)(7) of the Bankruptcy Code, the holder of a claim will
receive on account of such claim deferred cash payments, over
a period not exceeding six years after the date of assessment
of such claim, of a value, as of the effective date of the
plan, equal to the allowed amount of such claim.

10. If a class of claims is impaired under the plan, at least one
class of claims that is impaired has accepted the plan,
determined without including any acceptance of the plan by any
insider holding a claim of such class.

11. Confirmation of the plan is not likely to be followed by the
liquidation, or the need for further financial reorganization,
of the debtor or any successor to the Debtor under the plan,
unless such liquidation or reorganization is proposed in the
plan.

12. All fees payable under 28 U.S.C. ss. 1930, as determined by
the Bankruptcy Court at the hearing on confirmation of the
plan, have been paid or the plan provides for the payments of
all such fees on the effective date of the plan.

13. The plan provides for the continuation after its effective
date of payment of all retiree benefits, as that term is
defined in section 1114 of the Bankruptcy Code, at the level
established pursuant to subsection (e)(1)(B) or (g) of section
1114, at any time prior to confirmation of the Plan, for the
duration of the period the debtor has obligated itself to
provide such benefits.

The Debtors believe that their Plans satisfy all the statutory
requirements of chapter 11 of the Bankruptcy Code, that the Debtors have
complied or will have complied with all the requirements of chapter 11, and that
the Plans are proposed in good faith.

The Debtors believe that holders of all Allowed Claims and Equity
Interests impaired under the Plans will receive payments under each Plan having
a present value as of the Effective Date not less than the amounts likely to be
received if the Debtors were liquidated in a case under chapter 7 of the
Bankruptcy Code. At the Confirmation Hearing, the Bankruptcy Court will
determine whether holders of Allowed Claims or Allowed Equity Interests would
receive greater distributions under the Plans than they would receive in a
liquidation under chapter 7.

The Debtors also believe that the feasibility requirement for
confirmation of the Plans is satisfied by the fact that all cash on hand as of
the Confirmation Date or generated by prosecution of Avoidance Actions or
otherwise will be distributed pro rata to pay Allowed Claims. These facts and
others demonstrating the confirmability of the Plans will be shown at the
Confirmation Hearing.

D. Cramdown

In the event that any impaired Class of Claims or Equity Interests does
not accept either Plan, the Bankruptcy Court may still confirm said Plan at the
request of the Debtor if, as to each impaired Class which has not accepted such
Plan, the Bankruptcy Court

<PAGE>

determines that the Plan "does not discriminate unfairly" and is "fair and
equitable" with respect to that Class. A Plan of reorganization "does not
discriminate unfairly" within the meaning of the Bankruptcy Code if no Class
receives more than it is legally entitled to receive for its claims or equity
interests.

"Fair and equitable" has different meanings with respect to the
treatment of secured and unsecured claims. As set forth in section 1129(b)(2) of
the Bankruptcy Code, those meanings are as follows:

1. With respect to a class of secured claims, the plan provides:

(a) (i) that the holders of such claims retain the liens securing such
claims, whether the property subject to such liens is retained by the
debtor or transferred to another entity, to the extent of the allowed
amount of such claims; and

(ii) that each holder of a claim of such class
receive on account of such claim deferred cash payments
totaling at least the allowed amount of such claim, of a
value, as of the effective date of the plan, of at least the
value of such holder's interest in the estate's interest in
such property;

(b) for the sale, subject to section 363(k) of the Bankruptcy
Code, of any property that is subject to the liens securing
such claims, free and clear of such liens, with such liens to
attach to the proceeds of such sale, and the treatment of such
liens on proceeds under clause (a) and (b) of this
subparagraph; or

2. With respect to a class of unsecured claims, the plan
provides:

(a) that each holder of a claim of such class receive or
retain on account of such claim property of a value, as of the
effective date of the plan, equal to the allowed amount of
such claim; or

(b) the holder of any claim or interest that is junior to the
claims of such class will not receive or retain under the plan
on account of such junior claim or interest any property.

3. With respect to a class of interests, the plan provides:

(a) that each holder of an interest of such class receive or
retain on account of such interest property of a value, as of
the effective date of the plan, equal to the greatest of the
allowed amount of any fixed liquidation preference to which
such holder is entitled, any fixed redemption price to which
such holder is entitled or the value of such interest; or

<PAGE>

(b) that the holder of any interest that is junior to the
interests of such class will not receive or retain under the
plan on account of such junior interest any property.

In the event that one or more Classes of impaired Claims or Equity
Interests reject either Plan, the Bankruptcy Court will determine at the
Confirmation Hearing whether said Plan is fair and equitable with respect to,
and does not discriminate unfairly against, any rejecting impaired Class of
Claims or Equity Interests. For the reasons set forth above, the Debtors believe
that their Plans do not discriminate unfairly against, and is fair and equitable
with respect to, each impaired Class of Claims or Equity Interests.

XI. RISK FACTORS

The following is intended as a summary of certain risks associated with
the Plans, but it is not exhaustive and must be supplemented by the analysis and
evaluation made by each holder of a Claim or Equity Interest of either Plan and
this Disclosure Statement as a whole with such holder's own advisors.

A. Claim Resolution Risks

The timing and amount of the ultimate distribution to holders of
General Unsecured Claims will depend in large part on the resolution of the
Claim objection process and the proceeds to be received for the sale of the
Debtors' remaining assets. Because any such distribution will be based on a
fraction, the numerator of which will be the available assets and the
denominator of which will be the amount of Allowed Claims and any Contested
Claim Reserve, the percentage of recovery cannot be determined with any degree
of certainty until all assets have been liquidated and such Claims are finally
allowed or disallowed.

B. Bankruptcy Risks

1. Insufficient Acceptances

For a plan to be confirmed, each impaired class of claims and equity
interests is given the opportunity to vote to accept or reject the plan. With
regard to such impaired voting classes, the plan will be deemed accepted by a
class of impaired claims if the plan is accepted by claimants of such class
actually voting on the plan who hold at least two-thirds (2/3) in amount and
more than one-half (1/2) in number of the total allowed claims of the class
voted. Only those members of a class who vote to accept or reject the plan will
be counted for voting purposes. The Debtors reserve the right to request
confirmation pursuant to the cramdown provisions in section 1129(b) of the
Bankruptcy Code, which will allow confirmation of their Plans regardless of the
fact that a particular Class of Claims has not accepted the Plan. However, there
can be no assurance that any impaired Class of Claims under the Plans will
accept either Plan or that the Debtors would be able to use the cramdown
provisions of the Bankruptcy Code for confirmation of either of the Plans.

<PAGE>

2. Confirmation Risks

The following specific risks exist with respect to confirmation of the
Plans:

(a) Any objection to either Plan filed in the Chapter 11 Case
by a member of a Class of Claims or Equity Interests pursuant
to that Plan can either prevent confirmation of such Plan, or
delay such confirmation for a significant period of time.

(b) Since the Debtors may be seeking to obtain approval of
either or both Plans over the rejection of one or more
impaired Classes of Claims, the cramdown process could delay
confirmation.

C. Conditions Precedent

Confirmation of either Plan and the occurrence of each Effective Date
are subject to certain conditions precedent that may never occur. The Effective
Date of the Plans shall not occur unless and until the following conditions
shall have been satisfied or waived by each Debtor, as determined in its sole
discretion in consultation with the Committee: (a) the Confirmation Order shall
have been entered in form satisfactory to the Debtors; and (b) the Confirmation
Order shall have become a Final Order.

XII. ALTERNATIVES TO CONFIRMATION
AND CONSUMMATION OF THE PLAN

The Debtors have evaluated several reorganization alternatives to their
Plans, including the sale of the Debtors as a going concern and the chapter 7
liquidation of each of the Debtors. After studying these alternatives, the
Debtors concluded that the Plans are the best alternatives and will maximize
recoveries by holders of Claims, assuming confirmation and consummation of their
Plans. The following discussion provides a summary of the Debtors analysis
leading to its conclusion that their Plans will provide the highest value to
holders of Claims.

A. Chapter 7 Liquidation Alternative

The Debtors also have considered whether a chapter 7 liquidation of the
assets of each of the Debtors would be in the best interest of holders of
Claims. The Debtors believe that a liquidation in chapter 7 would result in
substantial diminution in the value to be realized by holders of Claims in
either of their Chapter 11 Cases because of (i) additional administrative
expenses involved in the appointment of a trustee, attorneys, accountants, and
other professionals to assist such trustee in the case of a chapter 7
proceeding; and (ii) the substantial time which would elapse before creditors
would receive any distribution in respect of their Claims. Consequently, the
Debtors believe that the Plan provides a substantially greater return to holders
of Claims than would a chapter 7 liquidation. See Liquidation Analysis attached
as Exhibit E.

<PAGE>

B. Alternatives if Plans are not Confirmed

If either of the Plans are not confirmed, the Debtors or any other
party in interest in the Chapter 11 Case could attempt to formulate and propose
a different Plan or Plans of reorganization. Such Plans might involve either a
reorganization and continuation of the Debtors' businesses, a sale of the
Debtors' businesses as a going concern, an orderly liquidation of the Debtors
assets, or a combination thereof. As a practical matter, however, since the
Debtors have already liquidated substantially all of their operating assets, a
Plan contemplating reorganization and continuation of the Debtors' businesses
may be highly problematic, if not impossible. Further, if in either of the
Debtors' cases a Plan cannot be confirmed, such chapter 11 case may be converted
to a liquidation proceeding under chapter 7 of the Bankruptcy Code. In a chapter
7 case, a trustee or trustees would be elected or appointed to liquidate the
assets of the Debtors. The proceeds of the liquidation would be distributed to
the creditors of the respective Debtor in accordance with the priorities
established by the Bankruptcy Code. As stated above, the Debtors believe that
their respective Plans offer creditors the best opportunity for maximum recovery
in these cases.

<PAGE>

XIII. CONCLUSION

The Debtors and their Official Committee of Unsecured Creditors urge
holders of Claims to vote to ACCEPT the Plans and to evidence such acceptance by
returning their ballots so that they will be received on or before 4:00 p.m.,
Eastern Time, on December 30, 1999.

Dated: November 12, 1999

Respectfully submitted,

ONCOR, INC.

By: /s/ Joseph R. Shaya
------------------------------------------
Name: Joseph R. Shaya
Title: Acting President and Chief Executive
Officer

CODON PHARMACEUTICALS, INC.

By: /s/ Joseph R. Shaya
------------------------------------------
Name: Joseph R. Shaya
Title: Acting President and Chief Executive
Officer