Exhibit 10.1
STOCK REDEMPTION AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 17 day of
September, 2001 by and between Glas-Aire Industries Group Ltd., a Nevada
corporation ("Glas-Aire") and Regency Affiliates, Inc., a Delaware corporation
and its wholly-owned subsidiary, Xxxxx.xxx, Inc., a Delaware corporation
(jointly referred to herein as "Regency").
RECITALS
A. Regency and its wholly-owned subsidiary Xxxxx.xxx, Inc., are the record
owners of 1,215,105 shares of Glas-Aire's $0.01 par value common stock (the
"Glas-Aire Stock").
X. Xxxx-Aire is the record owner of 4,040,375 shares of Regency's common
stock (the Regency Stock").
X. Xxxx-Aire deems it to be in its best interests to redeem the Glas-Aire
Stock owned by Regency.
NOW, THEREFORE, in consideration of the Recitals, which shall be deemed to
be a substantive part of this Agreement, and the mutual covenants, promises,
agreements, representations and warranties of the parties hereto, the Parties
hereto do hereby covenant, promise, agree, represent and warrant as follows:
1. Purchase and Sale of Glas-Aire Stock.
1.1. Purchase and Sale. On the terms and subject to the conditions set
forth in this Agreement, Regency agrees to sell and transfer to Glas-Aire,
and Glas-Aire agrees to purchase and accept from Regency, all of the
Glas-Aire shares owned by Regency for the Purchase Price.
1.2. Purchase Price. Glas-Aire agrees to pay to Regency at the Closing
$2,500,000 in cash (the "Cash Consideration") and 4,040,375 shares of
Regency's common stock (the "Stock Consideration"). The Cash Consideration
and the Stock Consideration shall be referred to as the "Purchase Price".
1.3. Closing. The Closing shall take place simultaneously with the
execution of this Agreement. The Closing shall take place in the offices of
Xxxxxxxxx & Associates, P.C., 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000 at a time acceptable to the Parties. Payment of the Cash
Consideration shall be made via wire transfer pursuant to wire transfer
instructions provided Glas-Aire by Regency. Delivery of the stock
certificates shall be accomplished pursuant to the Parties' instructions.
2. Representations and Warranties of Regency.
Regency, Xxxxx.xxx and their Affiliates represent and warrant to Glas-Aire
that at the date of execution of this Agreement and at the Closing:
2.1. Regency is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all necessary
corporate power and authority to carry on its business and to own and lease
the assets which it owns and leases.
2.2. Regency is the record and beneficial owner and at the Closing
Date has good and valid merchantable title to the Glas-Aire Stock free and
clear of any and all mortgages, pledges, liens, security interests,
conditional sale agreements, charges, restrictions, and encumbrances of
every nature whatsoever. The Glas-Aire Stock represents all of the issued
and outstanding shares of Glas-Aire capital stock owned of record or
beneficially by Regency. To Regency's knowledge, Regency does not have any
outstanding options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contract or
commitments to issue or sell, shares of capital stock of Glas-Aire or any
of such warrants, convertible securities or obligations.
2.3. Regency has not incurred any liability or obligation for
finders', brokerage or agents' fees or commissions in connection with this
Agreement or the transactions contemplated hereby.
2.4. Regency has the power and authority to execute, acknowledge, seal
and deliver this Agreement and all exhibits to this Agreement, to
consummate the transactions contemplated by this Agreement and all exhibits
to this Agreement and to take any and all other actions required to be
taken by Regency pursuant to the provisions of this Agreement and all
exhibits to this Agreement; and this Agreement and all exhibits to this
Agreement are valid and binding upon and fully enforceable against Regency
in accordance with their respective terms. Neither the execution,
acknowledgement, sealing and delivery of this Agreement or any exhibit
shall constitute any violation or breach of or default under Regency's
certificate of incorporation, as amended, or by-laws, as amended, or any
order, writ, injunction, decree, law, statute, rule or regulation.
2.5. Regency, its officers, directors, stockholders, accountants and
attorneys have at all times had during the course of the negotiations
leading to the execution, acknowledgement, sealing and delivery of this
Agreement, access to all of Glas-Aire's books and financial and operational
records and to all of the documents and information relating or pertaining
to Glas-Aire's operations and activities. Prior to executing,
acknowledging, sealing and delivering this Agreement, Regency, through its
designated employees, agents and representatives, including, but not
limited to, its attorneys and accountants, has examined to its satisfaction
said books, records, documents and information, and has been given the
opportunity to, and has availed itself of such opportunity to, ask any
questions of (and receive answers to such questions from) Glas-Aire's
officers and directors concerning any and all aspects of Glas-Aire's
operations and activities.
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2.6. No action, suit or proceeding is pending at any court or
quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction which is reasonably likely to result in an unfavorable
injunction, judgment, order, decree, ruling or charge which would (a)
prevent consummation of any of the material transactions contemplated by
this Agreement; or (b) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation.
2.7. Regency's Board of Directors has appointed a special committee of
independent, disinterested board members who have reviewed and approved the
transactions contemplated by this Agreement as being in the best interests
of Regency's shareholders.
2.8. Regency has received a fairness opinion from the accounting or
investment banking firm selected by the special committee which opines that
the transactions contemplated by this Agreement are fair from a financial
perspective to Regency's shareholders, and has provided Glas-Aire with a
copy of such report.
2.9. Except as provided by or disclosed in this Agreement, Regency has
not incurred for or on behalf of Glas-Aire any obligations, liabilities,
duties, damages, losses, costs, or expenses.
3. Representations and Warranties of Glas-Aire.
Glas-Aire represents and warrants to Regency that at the date of execution
of this Agreement and at the Closing:
3.1. Glas-Aire is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada and has all
necessary corporate power and authority to carry on its business and to own
and lease the assets which it owns and leases.
3.2. Glas-Aire is the record and beneficial owner and has good and
valid merchantable title to the Stock Consideration free and clear of any
and all mortgages, pledges, liens, security interests, conditional sale
agreements, charges, restrictions, and encumbrances of every nature
whatsoever. The Stock Consideration represents all of the issued and
outstanding Regency capital stock owned of record or beneficially by
Glas-Aire. To Glas-Aire's knowledge, Glas-Aire does not have any
outstanding options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contract or
commitments to issue or sell, shares of Regency's capital stock or any of
such warrants, convertible securities or obligations.
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3.3. Glas-Aire has not incurred any liability or obligation for
finders', brokerage or agents' fees or commissions in connection with this
Agreement or the transactions contemplated hereby.
3.4. Glas-Aire has the power and authority to execute, acknowledge,
seal and deliver this Agreement and all exhibits to this Agreement, to
consummate the transactions contemplated by this Agreement and all exhibits
to this Agreement and to take any and all other actions required to be
taken by Glas-Aire pursuant to the provisions of this Agreement and all
exhibits to this Agreement; and this Agreement and all exhibits to this
Agreement are valid and binding upon and fully enforceable against
Glas-Aire in accordance with their respective terms. Neither the execution,
acknowledgement, sealing and delivery of this Agreement or any exhibit
shall constitute any violation or breach of or default under Glas-Aire's
certificate of incorporation, as amended, or by-laws, as amended, or any
order, writ, injunction, decree, law, statute, rule or regulation.
3.5. Glas-Aire, its officers, directors, stockholders, accountants and
attorneys have at all times had during the course of the negotiations
leading to the execution, acknowledgement, sealing and delivery of this
Agreement, access to all of Regency's books and financial and operational
records and to all of the documents and information relating or pertaining
to Regency's operations and activities. Prior to executing, acknowledging,
sealing and delivering this Agreement, Glas-Aire, through its designated
employees, agents and representatives, including, but not limited to, its
attorneys and accountants, has examined to its satisfaction said books,
records, documents and information, and has been given the opportunity to,
and has availed itself of such opportunity to, ask any questions of (and
receive answers to such questions) the officers and directors of Regency
concerning any and all aspects of Regency's operations and activities.
3.6. No action, suit or proceeding is pending at any court or
quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction which is reasonably likely to result in an unfavorable
injunction, judgment, order, decree, ruling or charge which would (a)
prevent consummation of any of the material transactions contemplated by
this Agreement; or (b) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation.
3.7. Glas-Aire's Board of Directors has appointed a special committee
of independent, disinterested board members who have reviewed and approved
the transactions contemplated by this Agreement as being in the best
interests of Glas-Aire's shareholders.
3.8. Glas-Aire has received a fairness opinion from the accounting or
investment banking firm selected by the special committee which opines that
the transactions contemplated by this Agreement are fair from a financial
perspective to Glas-Aire's shareholders, and has provided Regency with a
copy of such report.
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3.9. The Special Committee has concluded that the transactions
contemplated by this Agreement will not cause Glas-Aire to become
insolvent.
3.10. Except as provided by or disclosed in this Agreement, Glas-Aire
has not incurred for or on behalf of Regency any obligations, liabilities,
duties, damages, losses, costs, or expenses.
4. Post-Closing Covenants.
The Parties covenant and agree that in case at any time after the
Closing any further action is necessary to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as any
other party may reasonably request, all at the sole cost and expense of the
requesting party.
5. Indemnification.
5.1. Indemnification by Regency. Regency shall indemnify and hold
Glas-Aire and its officers, directors and shareholders harmless against and
in respect of any and all losses, costs, expenses, claims, damages,
obligations and liabilities, including interest, costs of investigation,
penalties and reasonable attorney's fees and disbursements ("Damages")
which Glas-Aire or any such person may suffer, incur or become subject to
arising out of, based upon or otherwise in respect of any inaccuracy in or
breach of any representation or warranty of Regency made in or pursuant to
this Agreement or any agreement or non-fulfillment of any covenant or
obligation of Regency contained in this Agreement or such other agreements
and documents.
5.2. Indemnification by Glas-Aire. Glas-Aire shall indemnify and hold
Regency and its officers, directors and shareholders harmless against and
in respect of any and all Damages which Regency or any such person may
suffer, incur or become subject to arising out of, based upon or otherwise
in respect of any inaccuracy in or breach of any representation or warranty
of Glas-Aire made in or pursuant to this Agreement or any agreement or
document required to be delivered pursuant to this Agreement or any breach
or non-fulfillment of any covenant or obligation of Glas-Aire contained in
this Agreement or such other agreements and documents.
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6. Miscellaneous Provisions.
6.1. All covenants, provisions, agreements, representations and
warranties provided by this Agreement shall survive the execution,
acknowledgement, sealing and delivery of this Agreement, each Exhibit
hereto and all of the transactions contemplated hereby.
6.2. This Agreement shall be governed by, construed and enforced in
all respects in accordance with the laws of the State of Nevada.
6.3. As provided herein and as the context requires, the masculine
gender shall be deemed to include the feminine and the neuter genders and
vice-versa; and the singular shall be deemed to include the plural and
vice-versa.
6.4. This Agreement constitutes the entire agreement between the
parties and there are no other commitments or agreements binding the
parties other than set forth herein. This Agreement may be amended only by
an instrument in writing executed by the parties hereto.
6.5. All notices or other communications required or permitted by this
Agreement shall be deemed given only if in writing and mailed first class
mail, registered or certified mail, return receipt requested, postage
prepaid, and addressed as follows:
If to Regency, then:
To: Xx. Xxxxxxx Xxxxxxxx, President
Regency Affiliates, Inc.
00 X. Xxxxxxx Xxxxxxx, #000
Xxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxxxx Xxxxxxx P.C.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
If to Glas-Aire, then:
To: Xx. Xxxx Xxxx, General Manager and Chief Financial Officer
Glas-Aire Industries Group Ltd.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, B. C. V5M2E9
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With a copy to:
Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx & Associates, P. C.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
or to any such other address that a party to this Agreement shall notify
the other party of as provided in this Section 8.6.
6.6. The captions or headings provided in this Agreement are for
convenience only and shall not be deemed to be a part of this Agreement.
6.7. Each party hereto may deliver an executed signature page to this
Agreement by facsimile transmission to the other party, which facsimile
copy shall be deemed to be an original executed signature page; provided,
however, that such party shall deliver an original signature page to each
other party promptly thereafter. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all
of which counterparts together shall constitute one agreement with the same
effect as if the parties hereto had signed the same signature.
IN WITNESS WHEREOF, the parties have executed, acknowledged, sealed, and
delivered this Agreement the day and year first hereinabove set forth.
ATTEST: REGENCY AFFILIATES, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- --------------------------------
Xxxxxx Xxxxx Xxxxxxx X. Xxxxxxxx,
Secretary President
ATTEST: XXXXX.XXX, INC.
/s/ Xxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------- --------------------------------
Xxxxxx Xxxxx Xxxxxxx X. Xxxxxxxx,
Secretary President
ATTEST: GLAS-AIRE INDUSTRIES GROUP LTD.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx Xxxx
-------------------------- --------------------------------
Xxxxx Xxxxxxxx Xxxx Xxxx, General
Assistant Secretary Manager and Chief
Financial Officer
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