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
(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 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 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 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 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 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
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
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 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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President Xxxxxxx X. Xxxxxxxx,
/s/ Xxxxxxxxxx Xxxxx Dated: 8-2-99
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Xxxxxxxxxx Xxxxx
/s/ illegible And By /s/ Xxxxxx Xxxxxx
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Secretary Xxxxxx Xxxxxx,
/s/ Xxxx X. Xxxxxxxx Dated: 8-2-99
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Xxxx X. Xxxxxxxx
GLAS-AIRE INDUSTRIES GROUP LTD.
/s/ Xxxxxxxx Xxxxxxxxx By /s/ Xxxx Xxx Wie Ding
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Xxxxxxxx Xxxxxxxxx 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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Xxxxxxxx Xxxxxxxxx Xxxx Xxxx, Secretary
/s/ illegible Dated: 8-4-99
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