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Exhibit 1A
STOCK PURCHASE AND EXCHANGE AGREEMENT
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THIS AGREEMENT, made as of the day of August, 1999, between REGENCY
AFFILIATES, INC. ("Regency"), a corporation organized under the laws of the
State of Delaware, and GLAS-AIRE INDUSTRIES GROUP LTD. ("Glas-Aire"), a
corporation organized under the laws of the State of Nevada.
WITNESSETH:
WHEREAS, Regency Affiliates, Inc., through its wholly-owned subsidiary,
Xxxxx.xxx, Inc., is the owner of 516,915 shares of the issued and outstanding
Common Stock, $0.01 par value, of Glas-Aire Industries Group Ltd.; and
WHEREAS, Glas-Aire Industries Group Ltd. is the owner of 1,188,000
shares of the issued and outstanding Common Stock, $0.40 par value, of Regency
Affiliates, Inc.; and
WHEREAS, Regency Affiliates, Inc. desires to acquire additional shares
of the Common Stock, $0.01 par value, of Glas-Aire Industries Group Ltd.; and
WHEREAS, Glas-Aire Industries Group Ltd. desires to acquire additional
shares of the Common Stock, $0.40 par value, of Regency Affiliates, Inc.;
NOW, THEREFORE, in consideration of the premises, the mutual promises
hereinafter contained and other good and valuable considerations, receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION I
STOCK PURCHASE PRICE AND TERMS
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1.1 SALE AND PURCHASE OF THE REGENCY STOCK. Subject to the terms and
conditions hereof, on the Closing Date (as such term is hereinafter defined),
Regency shall sell to Glas-Aire and Glas-Aire shall purchase from Regency,
2,852,375 shares of the Common Stock, $0.40 par value of Regency (the "Regency
Stock") for a total purchase price ("Purchase Price") as follows:
(a) One Million Nine Hundred Sixty-eight Thousand Dollars
($1,968,000.00) payable in cash at Closing; and
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(b) Eighty-six Thousand (86,000) shares of the Common Stock,
$0.01 par value of Glas-Aire, deliverable at Closing (the
"Glas-Aire Stock").
1.2 CLOSING. The closing ("Closing") of the sale and purchase of the
Stock shall be held at the offices of Regency (or at such other place as may be
mutually agreed) on August ___, 1999.
1.3 DELIVERY OF STOCK CERTIFICATES. At the Closing:
(a) Regency shall deliver to Glas-Aire certificates
representing the Regency Stock, in such denominations as
reasonably requested by Glas-Aire.
(b) Glas-Aire shall deliver to Regency certificates
representing the Glas-Aire Stock, in such denominations as
reasonably requested by Regency.
1.4 EXAMINATION OF CERTIFICATES. Each party shall permit the other to
examine the certificates for the Regency Stock or Glas-Aire Stock, as the case
may be, endorsements, stock powers and supporting papers at the Closing and at
such times and dates prior thereto as such party may reasonably request.
SECTION II
REPRESENTATIONS AND WARRANTIES OF REGENCY AFFILIATES, INC.
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Regency represents and warrants to Glas-Aire that:
2.1 CORPORATE.
(a) The authorized capitalization of the Regency consists of
Twenty- five million shares of preferred and common stock of
which 12,632,089 shares of its $0.40 p.v. Common Stock are
validly issued, fully paid, non-assessable and outstanding,
and 12,460 shares are held by the Company as treasury shares.
(b) The copies previously furnished to Glas-Aire of the
Articles of Incorporation, the Bylaws and proceedings of the
shareholders and directors of Regency are true and correct.
(c) Except as set forth in Schedule 2.1(b), no agreement other
than this Agreement exists regarding the sale, issuance or
transfer of any shares of the Common Stock of Regency. At the
Closing, the Regency Stock shall be transferred to Glas-Aire
and upon such transfer, Glas-Aire shall acquire absolute title
to the Regency Stock
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free and clear of all liens, charges, encumbrances and
assessments whatsoever. The Regency Stock shall be issued
pursuant to an exemption from registration under the
Securities Act of 1933. No registration or filing with, and no
consent or approval of, or other action by any federal, state
or other governmental agency or instrumentality is or will be
necessary for the valid execution and performance of this
Agreement.
(d) Regency is a corporation organized, validly existing and
in good standing under the laws of the State of Delaware, and
is duly qualified in the jurisdictions in which the ownership
or leasing of property or the nature of its business require
its qualification; and Regency has the power to own and lease
its properties and carry on its business as and where now
conducted.
(e) The Consolidated Financial Statements of Regency as of the
end of the fiscal years ending December 31, 1998 and 1997, and
related notes, as contained in Regency's annual reports on SEC
Form 10-K, and as further set forth in the interim reports
filed by Regency on SEC Form10-Q, are true and correct, have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the
periods involved and accurately present the financial
condition of Regency as of the dates stated and the results of
its operations during such periods.
(f) There is no suit, action, administrative, arbitration or
other proceeding, or any governmental investigation, pending
or threatened, against Regency, or any of its respective
properties or assets or any basis known by Regency therefor,
which affects the validity of this Agreement or any agreement
contemplated herein or any action to be taken by Regency in
connection herewith or therein.
(g) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by
Regency have been duly authorized, and as of the Closing Date,
no further corporate authorization in connection therewith
will be required on the part of Regency.
(h) Neither the execution and delivery of this Agreement nor
compliance with the terms and provisions of this Agreement
will breach or violate any provision of the Articles of
Incorporation or Bylaws of Regency, or any statute, regulation
or ordinance of any governmental authority, or conflict with
or result in the breach of any term, condition or provision of
any agreement or instrument to which Regency is a party, or by
which Regency is or may be bound, or constitute a default
thereunder or result in the creation or imposition
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of any lien, charge, encumbrance, or restriction of any nature
whatsoever, or give to any person any interest or right,
including rights of termination, acceleration or cancellation,
in or with respect to the Regency Stock or the properties,
assets, contracts, or business of Regency.
2.2 INVESTMENT REPRESENTATION. Regency agrees that any Common Stock of
Glas-Aire which it may acquire by virtue of this Agreement has not been
registered under the Securities Act of 1933, as amended, shall be "restricted
stock" pursuant to SEC Rule 144, shall be acquired for investment purposes only
and not with a view toward distribution or resale; provided, however that this
provision shall become inoperative in the event the said Common Stock shall be
registered under the Securities Act of 1933, as amended, or in the event there
is presented to Glas-Aire an opinion of counsel satisfactory to Glas-Aire to the
effect that the offer and sale of the securities may lawfully be made without
registration under the Securities Act of 1933, as amended.
2.3 DISCLOSURE. No representation or warranty in this Agreement, nor
any statement, certificate, schedule or exhibit furnished or to be furnished by
or on behalf of Regency pursuant to this Agreement, nor any document or
certificate delivered to Glas-Aire pursuant to this Agreement in connection with
the transactions contemplated herein, contains or shall contain any untrue
statement of a material fact or omits or shall omit to state a material fact
necessary to make the statements contained therein not misleading.
SECTION III
REPRESENTATIONS AND WARRANTIES OF GLAS-AIRE INDUSTRIES GROUP LTD.
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Glas-Aire represents and warrants to Regency that:
3.1 CORPORATE.
(a) The authorized capitalization of the Glas-Aire consists of
1,000,000 shares of preferred and 3,000,000 shares of common
stock of which 1,732,417 shares of its $0.01 p.v. Common Stock
are validly issued, fully paid, non-assessable and
outstanding, and 158,872 shares are held by the Company as
treasury shares.
(b) The copies previously furnished to Regency of the Articles
of Incorporation, the Bylaws and proceedings of the
shareholders and directors of Glas-Aire are true and correct.
(c) Except as set forth in Schedule 2.1(b), no agreement other
than this Agreement exists regarding the sale, issuance or
transfer of any shares of the Common Stock of Glas-Aire. At
the Closing, the Glas-Aire Stock shall be transferred to
Regency and upon such
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transfer, Regency shall acquire absolute title to the
Glas-Aire Stock free and clear of all liens, charges,
encumbrances and assessments whatsoever. The Glas-Aire Stock
shall be issued pursuant to an exemption from registration
under the Securities Act of 1933. No registration or filing
with, and no consent or approval of, or other action by any
federal, state or other governmental agency or instrumentality
is or will be necessary for the valid execution and
performance of this Agreement.
(d) Glas-Aire is a corporation organized, validly existing and
in good standing under the laws of the State of Nevada, and is
duly qualified in the jurisdictions in which the ownership or
leasing of property or the nature of its business require its
qualification; and Glas-Aire has the power to own and lease
its properties and carry on its business as and where now
conducted.
(e) The Consolidated Financial Statements of Glas-Aire as of
the end of the fiscal years ending January 31, 1999 and 1998,
and related notes, as contained in Glas-Aire's annual reports
on SEC Form 10-K, and as further set forth in the interim
reports filed by Glas-Aire on SEC Form 10-Q, are true and
correct, have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved and accurately present the
financial condition of Glas-Aire as of the dates stated and
the results of its operations during such periods.
(f) There is no suit, action, administrative, arbitration or
other proceeding, or any governmental investigation, pending
or threatened, against Glas-Aire, or any of its respective
properties or assets or any basis known by Glas-Aire therefor,
which affects the validity of this Agreement or any agreement
contemplated herein or any action to be taken by Glas-Aire in
connection herewith or therein.
(g) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by
Glas-Aire have been duly authorized, and as of the Closing
Date, no further corporate authorization in connection
therewith will be required on the part of Glas-Aire.
(e) Neither the execution and delivery of this Agreement nor
compliance with the terms and provisions of this Agreement
will breach or violate any provision of the Articles of
Incorporation or Bylaws of Glas-Aire, or any statute,
regulation or ordinance of any governmental authority, or
conflict with or result in the breach of any term, condition
or provision of any agreement or instrument to which Glas-Aire
is a party, or by which Glas-Aire is or may be bound, or
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constitute a default thereunder or result in the creation or
imposition of any lien, charge, encumbrance, or restriction of
any nature whatsoever, or give to any person any interest or
right, including rights of termination, acceleration or
cancellation, in or with respect to the Glas-Aire Stock or the
properties, assets, contracts, or business of Glas-Aire.
3.2 INVESTMENT REPRESENTATION. Glas-Aire agrees that any Common Stock
of Regency which it may acquire by virtue of this Agreement has not been
registered under the Securities Act of 1933, as amended, shall be "restricted
stock" pursuant to SEC Rule 144, shall be acquired for investment purposes only
and not with a view toward distribution or resale; provided, however that this
provision shall become inoperative in the event the Common Stock shall be
registered under the Securities Act of 1933, as amended, or in the event there
is presented to Regency an opinion of counsel satisfactory to Regency to the
effect that the offer and sale of the securities may lawfully be made without
registration under the Securities Act of 1933, as amended.
3.3 DISCLOSURE. No representation or warranty in this Agreement, nor
any statement, certificate, schedule or exhibit furnished or to be furnished by
or on behalf of Glas-Aire pursuant to this Agreement, nor any document or
certificate delivered to Regency pursuant to this Agreement in connection with
the transactions contemplated herein, contains or shall contain any untrue
statement of a material fact or omits or shall omit to state a material fact
necessary to make the statements contained therein not misleading.
SECTION IV
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CONDITIONS PRECEDENT TO OBLIGATIONS OF REGENCY
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4.1 GENERAL. Each and every obligation of Regency to be performed upon
or in connection with the Closing shall be subject to the satisfaction on or
before the Closing Date of the following conditions, any of which may be waived
in writing by Regency:
(a) REPRESENTATION AND WARRANTIES. The representations and
warranties of Glas-Aire contained in this Agreement shall be
true at and as of the Closing as though such representations
and warranties were made at and as of the Closing Date, and
all references in such representations and warranties,
specific or implied, to any date which such representations
and warranties are made also shall mean and include the
Closing Date.
(b) COMPLIANCE WITH AGREEMENT. Glas-Aire shall have performed
and complied with its obligations under this Agreement which
are to be performed or complied with on or prior to the
Closing Date.
(c) NO LITIGATION. No investigation, suit, action or other
proceeding shall be threatened or pending before any court or
governmental
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agency which, in the opinion of counsel to Regency, might
result in (i) the restraint, prohibition or the obtaining of
damages or other relief in connection with this Agreement or
the consummation of the transactions contemplated hereby, or
(ii) any material claim against Regency.
(d) EVENT OF DEFAULT. There shall have been no event of
default under this Agreement nor any event, which with notice
or lapse of time, or both, would become such an event of
default.
(e) CORPORATE PROCEEDINGS. All corporate and other proceedings
and all documents incidental to the transactions involved in
the Closing shall be satisfactory in substance and form to
Regency, and Regency shall have received all such counterpart
originals or certified or other copies of such documents as
Regency reasonably may request.
(f) EXHIBITS. Each and every exhibit called for herein shall
have been attached hereto and shall contain no disclosure
which materially adversely affects, or would, with the lapse
of time, materially adversely affect the financial condition,
business, results of operations, properties or assets of
Glas-Aire.
SECTION V
CONDITIONS PRECEDENT TO OBLIGATIONS OF GLAS-AIRE INDUSTRIES
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GROUP LTD.
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5.1 GENERAL. Each and every obligation of Glas-Aire to be performed
upon or in connection with the Closing shall be subject to the satisfaction on
or before the Closing Date of the following conditions, any of which may be
waived in writing by Glas-Aire:
(a) REPRESENTATION AND WARRANTIES. The representations and
warranties of Regency contained in this Agreement shall be
true at and as of the Closing as though such representations
and warranties were made at and as of the Closing Date, and
all references in such representations and warranties,
specific or implied, to any date which such representations
and warranties are made also shall mean and include the
Closing Date.
(b) COMPLIANCE WITH AGREEMENT. Regency shall have performed
and complied with its obligations under this Agreement which
are to be performed or complied with on or prior to the
Closing Date.
(c) NO LITIGATION. No investigation, suit, action or other
proceeding
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shall be threatened or pending before any court or
governmental agency which, in the opinion of counsel to
Glas-Aire, might result in (i) the restraint, prohibition or
the obtaining of damages or other relief in connection with
this Agreement or the consummation of the transactions
contemplated hereby, or (ii) any material claim against
Glas-Aire.
(d) EVENT OF DEFAULT. There shall have been no event of
default under this Agreement nor any event, which with notice
or lapse of time, or both, would become such an event of
default.
(e) CORPORATE PROCEEDINGS. All corporate and other proceedings
and all documents incidental to the transactions involved in
the Closing shall be satisfactory in substance and form to
Glas-Aire, and Glas-Aire shall have received all such
counterpart originals or certified or other copies of such
documents as Glas-Aire reasonably may request.
(f) EXHIBITS. Each and every exhibit called for herein shall
have been attached hereto and shall contain no disclosure
which materially adversely affects, or would, with the lapse
of time, materially adversely affect the financial condition,
business, results of operations, properties or assets of
Regency.
SECTION VI
CLOSING
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6.1 REGENCY'S ACTIONS. Regency shall take the following actions at the
Closing:
(a) Regency shall furnish Glas-Aire a copy, duly certified by
the secretary or assistant secretary of Regency, of
resolutions duly adopted by the Board of Directors of Regency
authorizing and approving the execution, delivery and
performance by Regency of this Agreement and the matters
contained herein.
(b) Regency shall make delivery of the Regency Stock due at
Closing.
6.2 GLAS-AIRE'S ACTIONS. Glas-Aire shall take the following actions at
the Closing:
(a) Glas-Aire shall furnish Regency a copy, duly certified by
the
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secretary or assistant secretary of Glas-Aire, of resolutions
duly adopted by the Board of Directors of Glas-Aire
authorizing and approving the execution, delivery and
performance by Glas-Aire of this Agreement and the matters
contained herein.
(b) Glas-Aire shall make delivery of the Glas-Aire Stock due
at Closing.
(c) Glas-Aire shall make payment of the cash portion of the
Purchase Price due at Closing.
SECTION VII
INDEMNIFICATIONS
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7.1 Regency agrees to indemnify Glas-Aire and hold Glas-Aire harmless
from any and all liabilities, obligations, losses, damages and deficiencies
resulting from or arising out of any breach of any covenant or obligation made
or incurred by Regency as provided for herein.
7.2 Glas-Aire agrees to indemnify Regency and hold Regency harmless
from any and all liabilities, obligations, losses, damages and deficiencies
resulting from or arising out of any breach of any covenant or obligation made
or incurred by Glas-Aire as provided for herein.
SECTION VIII
MISCELLANEOUS
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8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Regency and Glas-Aire contained in this Agreement shall survive
the Closing on the Closing Date for a period of four (4) years.
8.2 EXPENSES. Whether or not any of the transactions contemplated under
this Agreement shall be consummated, each party hereto shall pay or cause to be
paid the cost of such party's performance of and compliance with this Agreement,
including all taxes (including penalties and interest) imposed upon such party
by any taxing authority in connection with the transactions contemplated by this
Agreement. Attorney fees incurred by the parties in connection with this
Agreement shall be borne by the party incurring said fees.
8.3 BROKERS. Regency and Glas-Aire each represents, warrants and
covenants to the other that there is no broker entitled to compensation by
reason of this transaction.
8.4 MODIFICATION AND WAIVERS. This Agreement may be modified, amended
or changed only by an instrument in writing signed by the party against whom the
enforcement thereof is
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sought. No waiver of the performance of any term or provision of this Agreement
shall be valid or effective for any purpose unless such waiver shall be in
writing and signed by the party making the waiver.
8.5 ENTIRE AGREEMENT, AMENDMENT, SUCCESSORS. This Agreement (including
the Exhibits hereto) and the other agreements referred to herein constitute the
entire agreement between the parties with respect to the transactions
contemplated herein, and supersedes all prior agreements and undertakings
between the parties relating to such transactions. Neither party shall be liable
or bound to the other party hereto in any manner with respect to such
transactions by any warranties, representations, indemnities, covenants or
agreements except as specifically set forth herein or in any amendment to this
Agreement which is in writing and signed by both parties. This Agreement shall
be binding on and inure to the benefit of the successors and permitted assigns
of the respective parties hereto.
8.6 COUNTERPARTS. This Agreement may be executed in several
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
8.7 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Florida.
8.8 HEADINGS. The various headings used in this Agreement are for
convenience only and are not to be used in interpreting the text of the Section
in which they appear or to which they relate.
8.9 FURTHER ASSURANCES. Regency and Glas-Aire each agrees that it will
upon the reasonable request of the other do, execute, acknowledge and deliver
all such further acts, assignments, transfers, conveyances, and assurances as
may be necessary or desirable to assign, transfer, grant, convey, assure,
perfect, confirm to and vest in the other, its successors and assigns, title to
and possession of the property to be transferred hereunder.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf and attested by its officers thereunto
duly authorized, all as of the day and year first above written.
WITNESSES REGENCY AFFILIATES, INC.
/s/ Xxxxxxx X. Xxxx By /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
/s/ Xxxxxxxxxx Xxxxx Dated: 8-2-99
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/s/ illegible And By /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, Secretary
/s/ Xxxx X. Xxxxxxxx Dated: 8-2-99
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GLAS-AIRE INDUSTRIES GROUP LTD.
/s/ Xxxxxxxx Xxxxxxxxx By /s/ Xxxx Xxx Wie Ding
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Xxxx Xxx Wie Ding, President
/s/ illegible Dated: 8-4-99
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/s/ Xxxxxxxx Xxxxxxxxx And By /s/ Xxxx Xxxx
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Xxxx Xxxx, Secretary
/s/ illegible Dated: 8-4-99
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