Exhibit 1
STOCK SALE AGREEMENT
January 21, 1998
Avatex Corporation
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Gentlemen:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (sometimes referred to as "Seller") hereby confirms his
agreement with you (sometimes referred to as "Purchaser") as follows:
1. PURCHASE AND SALE OF STOCK
1.1 Financial Terms. On the Closing Date (as defined below), Seller
agrees to sell to you, and you agree to acquire from Seller, 300,000 shares of
common stock of ▇▇ ▇▇▇▇▇▇▇ Financial Services, Inc. (the "Company"), $.001 par
value (the "Purchased Shares"), at a purchase price of $11.50 per share, for a
total purchase price of $3,450,000.
1.2 Closing. The Purchased Shares will be delivered to you via, and
at the offices of, your legal counsel, Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, against delivery of the purchase price
therefor (which shall be made by wire transfer to the escrow account of legal
counsel to Seller, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, account number
▇▇-▇▇▇-▇▇▇, at Wachovia Bank of Georgia, Atlanta, Georgia, ABA Routing Number:
▇▇▇▇▇▇▇▇▇), by 2:00 P.M., Eastern Time, on January 22, 1998, or such other date
or time as shall be mutually agreed upon by Seller and you (the "Closing Date").
2. REPRESENTATIONS AND WARRANTIES
2.1 Representations of Seller. Seller represents and warrants that
(a) Seller has good, valid, and marketable title to the Purchased Shares, free
and clear of liens, claims, restrictions, or encumbrances of any kind, (b) upon
conveyance and delivery of the Purchased Shares and payment therefor by
Purchaser, Purchaser shall be the owner of such Purchased Shares free and clear
of liens, claims, restrictions, or encumbrances attributable to any action by
Seller or the Company, and (c) the documents filed by the Company with the
Securities and Exchange Commission from January 1, 1996 to date pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, did not contain
when filed
an untrue statement of material fact or, other than disclosure of the proposed
acquisition by the Company of Genesis Merchant Group Securities LLC ("GMG")
described below, omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
2.2 Disclosure of GMG Transaction. Set forth as Exhibit A hereto is
the substantially final form of an Agreement and Plan of Combination (the
"Combination Agreement") that contains the material terms of a proposed business
combination transaction with GMG (the "Combination Transaction"), pursuant to
which the Company and GMG will be combined into a new entity ("Newco") and the
outstanding common stock of the Company, including the Purchased Shares, and at
least 90% of the outstanding equity interests of GMG, will be exchanged for
common stock of Newco. Seller gives no assurance that the proposed Combination
Transaction will be consummated or will be consummated on the terms described in
the Combination Agreement, or that any of the expected benefits of the
Combination Transaction will be achieved. Purchaser hereby acknowledges that it
has reviewed the Combination Agreement, that the information described in the
Combination Agreement is not public information, that it will maintain the
confidentiality of such information in accordance with Section 3.1 hereof, and
that it has sufficient information about the proposed Combination Transaction
(and has reviewed sufficient publicly available information about the Company)
to make an informed and knowledgeable decision to acquire the Purchased Shares.
Purchaser also acknowledges that it has been afforded an opportunity to ask
questions of and to obtain additional information from Seller prior to making
its investment decision.
2.3 Representations of Purchaser. You represent, and in entering
into this Agreement Seller understands, that (i) you are an "accredited
investor" as defined in Rule 501(a) of the General Rules and Regulations under
the Securities Act of 1933, as amended (the "Securities Act") and (ii) you will
not offer or sell any of the Purchased Shares except pursuant to an effective
registration statement under the Securities Act or in transactions that do not
require registration under the Securities Act. You further represent that you
are acquiring the Purchased Shares for your own account and with your general
assets for the purpose of investment and not with a view to the resale or
distribution thereof, and that you have no present intention of selling,
negotiating, or otherwise disposing of any Purchased Shares, except in
accordance with applicable provisions of the Securities Act and other securities
laws or regulations.
3. COVENANTS
3.1 Confidentiality. You understand and agree that the information
set forth on Exhibit A hereto and all other information conveyed to you
concerning the
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Combination Transaction is confidential and has not been publicly disclosed by
the parties thereto, and that such confidential information has been disclosed
to you solely in connection with your proposed purchase of the Purchased Shares.
You agree to maintain the confidential nature of such information, and refrain
from engaging in any public market transaction involving the Common Stock of the
Company, unless and until the material terms of such proposed Combination
Transaction become publicly known or you have been notified by Seller or the
Company that the proposed Combination Transaction has been abandoned. Seller
agrees to notify you promptly at such time that the Company has publicly
disclosed any such information or has abandoned the Combination Transaction.
3.2 Registration of Purchased Shares. Seller agrees to cause the
Company to execute and deliver to you a registration rights agreement in the
form attached as Exhibit B.
Purchaser understands and agrees that the securities purchased
hereunder are restricted securities within the meaning of Rule 144 under the
Securities Act; that such securities are not registered and must be held unless
they are subsequently registered for resale or an exemption from such
registration is available. Furthermore, Purchaser understands that each
certificate representing the Purchased Shares shall be endorsed with the
following restrictive legend, or close facsimile thereof:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "FEDERAL ACT"), OR ANY STATE
SECURITIES LAW, AND HAVE BEEN ACQUIRED BY THE REGISTERED OWNER HEREOF FOR
PURPOSES OF INVESTMENT AND HAVE BEEN ISSUED OR SOLD IN RELIANCE ON
STATUTORY EXEMPTIONS CONTAINED IN THE FEDERAL ACT OR AVAILABLE UNDER
APPLICABLE STATE SECURITIES LAWS. THE SHARES MAY NOT BE SOLD, TRANSFERRED,
OR OTHERWISE DISPOSED OF EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE
FEDERAL ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS; IN THE CASE OF RELIANCE
UPON AN EXEMPTION, THE COMPANY MUST HAVE RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO IT THAT SUCH TRANSACTION IS EXEMPT AND DOES NOT REQUIRE
SUCH REGISTRATION OF THE SHARES."
On the front of each certificate, there may be placed the following notation:
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"RESTRICTIONS ON TRANSFER STATED ON REVERSE SIDE"
5. INDEMNIFICATION
Purchaser, on the one hand, and Seller, on the other hand, each hereby
agrees to indemnify the other and hold the other harmless from and against any
liability, obligation, claim, loss, cost, damage, and expense (including
reasonable attorneys' fees and expenses incurred in prosecuting or defending any
claim for any such liability, loss, or damage) arising out of or resulting from
the untruth or inaccuracy of any covenant, representation, or warranty of the
indemnifying party contained in this Agreement. The indemnities contained herein
shall expire two (2) years from the Closing Date, unless prior to such date the
indemnified party shall inform the indemnifying party of a claim hereunder, and
except that indemnity shall be available indefinitely with respect to any
liability, obligation, claim, loss, cost, damage, or expense arising out of or
as a result of any statement of Seller in clause (a) or (b) of Section 2.
6. MISCELLANEOUS
6.1 Further Assurances to Purchaser. If, at any time after the
Closing Date, Purchaser acting reasonably shall consider or be advised that any
further assignments, assurances, or other acts are necessary, desirable, or
proper to (a) vest, perfect, or confirm in Purchaser's name (or the name of any
lawful transferee of Purchaser) title in, interest to, or rights of any of the
Purchased Shares, (b) ensure proper and complete compliance with Federal, state,
and local administrative or regulatory laws, or (c) otherwise carry out the
purposes of this Agreement, Seller agrees to execute and deliver all such
assignments and assurances and do all acts reasonably necessary or proper to
accomplish the same.
6.2 Legality of Sale. The purchase and sale of the Purchased Shares
is subject to the legality of the offer and sale of the Purchased Shares in the
state of domicile of Purchaser. This Agreement does not constitute an offer to
sell, or a solicitation of an offer to buy, the Purchased Shares in any
jurisdiction where it is unlawful to make such offer or solicitation.
6.3 Purchaser Not Liable for Brokerage Commission. Purchaser shall
have no liability or obligation arising as a result of any agreement or
arrangement of Seller or the Company for any broker's commission, finder's fee,
or similar payment in connection with the transaction contemplated by this
Agreement, and Seller agrees to indemnify and hold Purchaser harmless from and
against any such payment.
6.4 Entire Agreement. This Agreement, together with the Exhibits
referred to herein, contains the entire agreement and understanding of the
parties with respect
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to the subject matter hereof, and no representations, promises, agreements, or
understandings regarding the subject matter hereof shall be of any force or
effect unless in writing, executed by the party to be bound, and dated
subsequent to the date hereof.
6.5 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of New York.
6.6 Expenses. Seller and Purchaser will each pay all the costs and
expense of their respective performance, preparation, and execution of, and
compliance with, this Agreement, including, without limitation, all fees and
expense of their respective agents, representatives, counsel, and accountants,
except as may otherwise be provided in the registration rights agreement
attached as Exhibit B.
6.7 Severability. If any provision of this Agreement shall be held
invalid or unenforceable, the remainder nevertheless shall remain in full force
and effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it nevertheless shall remain in full force and effect
in all other circumstances.
6.8. Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of Purchaser, Seller, and their respective successors and
assigns.
6.9 Modifications and Waivers. No change, modification, or waiver of
any provision of this Agreement shall be valid or binding unless it is in a
writing dated subsequent to the date hereof and signed by the party intended to
be bound. No waiver of any breach, term, or condition of this Agreement by
either party shall constitute a subsequent waiver of the same or any other
breach, term, or condition.
The execution hereof by you shall constitute a binding contract between us,
under seal, for the uses and purposes set forth above.
Very truly yours,
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AGREED AND ACCEPTED as of the
date first above-written:
Avatex Corporation
By:------------------------------
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