ASSET PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made this 15th day of March, 2000,
among Regents Road, Ltd., a Colorado corporation ("Regents"); Ad Pads L.L.C., a
New Jersey limited liability company ("Ad Pads"); and Xxxxx X. Xxxxxxxxxx, the
sole stockholder of Ad Pads ("Xxxxxxxxxx").
W I T N E S S E T H:
RECITALS
WHEREAS, Ad Pads owns various assets as set forth in Exhibit A hereto
(the "Ad Pads Assets"), all of which Ad Pads wishes to sell to Regents and
Regents wishes to acquire.
WHEREAS, the Board of Directors of Regents and the Board of Managers of
Ad Pads have adopted resolutions pursuant to which Regents shall acquire and Ad
Pads shall sell the Ad Pads Assets; and
WHEREAS, the sole consideration for the Ad Pads Assets shall be the
exchange of no par value common stock of Regents (which shares are all
"restricted securities" as defined in Rule 144 of the Securities and Exchange
Commission) as outlined in Exhibit B; and
WHEREAS, Ad Pads shall acquire in exchange the "restricted securities"
of Regents in a reorganization within the meaning of Section 368(a)(1)(C),
Section 351 or other tax exempt Sections, rules or regulations of the Internal
Revenue Code of 1986, as amended, to the extent any such Sections, rules or
regulations are applicable to this Agreement and the transactions contemplated
hereby;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is agreed:
Section 1
Exchange of Stock
1.1 Number of Shares. Regents shall issue 16,000,000 shares or an
amount equal to approximately eighty-nine percent (85.7%) of its post-Agreement
outstanding no par value common voting stock in exchange for the Ad Pads Assets,
subject to the assumption of liabilities related to the Ad Pads Assets as
carried on the books and records of Ad Pads and its financial statements
attached hereto as Exhibit E. All of the shares of Regents common stock to be
issued to Ad Pads shall be "restricted securities" as defined in Rule 144 of the
Securities and Exchange Commission, and shall be issued in accordance with and
subject to applicable securities laws, rules and regulations, and, when issued
for the consideration indicated, shall be deemed fully paid and non-assessable.
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1.2 Further Assurances. At the Closing and from time to time
thereafter, Ad Pads shall execute such additional instruments and take such
other action as Regents may request in order to exchange and transfer clear
title and ownership in the Ad Pads Assets to Regents, without further
consideration.
1.3 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing, the present
directors and executive officers of Regents shall designate the directors
nominated by Ad Pads to serve in their place and stead, until the next
respective annual meetings of the stockholders and the Board of Directors of
Regents, and until their respective successors shall be elected and qualified or
until their respective prior resignations or terminations, who shall be: Xxxxx
X. Xxxxxxxxxx, Xxxxx Xxxxxxxxx and Xxxxxx Xxxxxxx, Esq.; and then, the present
directors and executive officers of Regents shall resign, in seriatim.
1.4 Change of Name and Domicile. Following the Closing of this
Agreement, Regents shall amend its Articles of Incorporation to change its name
to "Ad Pads Incorporated" or some similar name selected by the newly designated
and constituted Board of Directors of Regents and to change its domicile from
the State of Colorado to the State of Delaware.
1.5 Assets and Liabilities. Regents shall have no assets or liabilities
immediately prior to Closing, and all costs incident to this Agreement shall
have been paid or provided for.
1.6 Closing. Closing shall take place on the exchange of duly executed
copies of this Agreement and any related exhibits by Regents and Ad Pads, and
the satisfaction or waiver of any required conditions to Closing of the parties
set forth in Sections 5 and 6 hereof.
Section 2
Closing
The Closing contemplated by Section 1 shall be held at the offices of
Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205 Hermes Building, 000 Xxxx 000 Xxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, on or before ten days following the execution and
delivery of this Agreement, unless another place or time is agreed upon in
writing by the parties. The Closing may be accomplished by wire, express mail or
other courier service, conference telephone communications or as otherwise
agreed by the respective parties or their duly authorized representatives.
Section 3
Representations and Warranties of Regents
Regents represents and warrants to, and covenants with Ad Pads as follows:
3.1 Corporate Status. Regents is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado and is
licensed or qualified as a foreign corporation in all states in which the nature
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of its business or the character or ownership of its properties makes such
licensing or qualification necessary (Colorado only). Regents is a publicly-held
company, having previously and lawfully offered and sold a portion of its
securities in accordance with applicable federal and state securities laws,
rules and regulations. Its common stock is nominally quoted on the OTC Bulletin
Board of the National Association of Securities Dealers, Inc. (the "NASD") under
the symbol "RGRD."
3.2 Capitalization. The current pre-Agreement authorized capital stock
of Regents consists of 50,000,000 shares of no par value common voting stock, of
which 1,500,015 shares are issued and outstanding, all fully paid and
non-assessable; and 5,000,000 shares of no par value preferred stock, of which
no shares are issued and outstanding. Except as otherwise provided herein, there
are no outstanding options, warrants or calls pursuant to which any person has
the right to purchase any authorized and unissued common or preferred stock of
Regents. None of these securities has been issued with or are subject to
"registration rights" of any type of nature.
3.3 Financial Statements. The financial statements of Regents furnished
to Ad Pads, consisting of audited financial statements for the year ended
December 31, 1998 and 1997, and the period ended September 30, 1999, attached
hereto as Exhibit C and incorporated herein by reference, are correct and fairly
present the financial condition of Regents at such dates and for the periods
involved; such statements were prepared in accordance with generally accepted
accounting principles consistently applied, and no material change has occurred
in the matters disclosed therein, except as indicated in Exhibit D, which is
attached hereto and incorporated herein by reference. Such financial statements
do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
3.4 Undisclosed Liabilities. Regents has no liabilities of any nature
except to the extent reflected or reserved against in its balance sheets,
whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit D.
3.5 Interim Changes. Since the date of its balance sheets, except as
set forth in Exhibit D, there have been no (1) changes in financial condition,
assets, liabilities or business of Regents which, in the aggregate, have been
materially adverse; (2) damages, destruction or losses of or to property of
Regents, payments of any dividend or other distribution in respect of any class
of stock of Regents, or any direct or indirect redemption, purchase or other
acquisition of any class of any such stock; or (3) increases paid or agreed to
in the compensation, retirement benefits or other commitments to its employees.
3.6 Title to Property. Regents has good and marketable title to all
properties and assets, real and personal, reflected in its balance sheets, and
the properties and assets of Regents are subject to no mortgage, pledge, lien or
encumbrance, except for liens shown therein or in Exhibit D, with respect to
which no default exists.
3.7 Litigation. There is no litigation or proceeding pending, or to the
knowledge of Regents, threatened, against or relating to Regents, its properties
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or business, except as set forth in Exhibit D. Further, no officer, director or
person who may be deemed to be an "affiliate" of Regents is party to any
material legal proceeding which could have an adverse effect on Regents
(financial or otherwise), and none is party to any action or proceeding wherein
any has an interest adverse to Regents.
3.8 Books and Records. From the date of this Agreement to the Closing,
Regents will (1) give to Ad Pads or its representatives full access during
normal business hours to all of Regents' offices, books, records, contracts and
other corporate documents and properties so that Ad Pads or its representatives
may inspect and audit them; and (2) furnish such information concerning the
properties and affairs of Regents as Ad Pads or its representatives may
reasonably request.
3.9 Tax Returns. To the extent required by applicable law, Regents has
filed all federal and state income or franchise tax returns required to be filed
or has received currently effective extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Regents and its representatives will keep confidential any information
which they obtain from Ad Pads concerning the properties, assets and business of
Ad Pads. If the transactions contemplated by this Agreement are not consummated
by March 31, 2000, Regents will return to Ad Pads all written matter with
respect to Ad Pads obtained by Regents in connection with the negotiation or
consummation of this Agreement.
3.11 Corporate Authority. Regents has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Ad Pads or its representatives at the Closing a
certified copy of resolutions of its Board of Directors authorizing execution of
this Agreement by Regents' officers and performance thereunder, and that the
directors adopting and delivering such resolutions are the duly elected and
incumbent directors of Regents.
3.12 Due Authorization. Execution of this Agreement and performance by
Regents hereunder have been duly authorized by all requisite corporate action on
the part of Regents, and this Agreement constitutes a valid and binding
obligation of Regents and performance hereunder will not violate any provision
of the Articles of Incorporation, Bylaws, agreements, mortgages or other
commitments of Regents.
3.13 Environmental Matters. Regents has no knowledge of any assertion
by any governmental agency or other regulatory authority of any environmental
lien, action or proceeding, or of any cause for any such lien, action or
proceeding related to the business operations of Regents or Regents'
predecessors. In addition, to the best knowledge of Regents, there are no
substances or conditions which may support a claim or cause of action against
Regents or any of Regents' current or former officers, directors, agents or
employees, whether by a governmental agency or body, private party or
individual, under any Hazardous Materials Regulations. "Hazardous Materials"
means any oil or petrochemical products, PCB's, asbestos, urea formaldehyde,
flammable explosives, radioactive materials, solid or hazardous wastes,
chemicals, toxic substances or related materials, including, without limitation,
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any substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," or "toxic substances"
under any applicable federal or state laws or regulations. "Hazardous Materials
Regulations" means any regulations governing the use, generation, handling,
storage, treatment, disposal or release of hazardous materials, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, the Resource Conservation and Recovery Act and the Federal Water
Pollution Control Act.
3.14 Access to Information Regarding Ad Pads. Regents acknowledges that
it has been delivered copies of what has been represented to be documentation
containing all material information respecting Ad Pads and the Ad Pads Assets;
that it has had a reasonable opportunity to review such documentation and
discuss it, to the extent desired, with its legal counsel, directors and
executive officers; that it has had, to the extent desired, the opportunity to
ask questions of and receive responses from the directors and executive officers
of Ad Pads, and with the legal and accounting firms of Ad Pads, with respect to
such documentation; and that to the extent requested, all questions raised have
been answered to Regents' complete satisfaction.
Section 4
Representations, Warranties and Covenants of Ad Pads and Xxxxxxxxxx
Ad Pads and Xxxxxxxxxx represent and warrant to, and covenant with,
Regents as follows:
4.1 Ownership. Ad Pads owns the Ad Pads Assets, free and clear of any
liens or encumbrances of any type or nature whatsoever, and has full right,
power and authority to convey the Ad Pads Assets without qualification or
consents of any others.
4.2 Corporate Status. Ad Pads is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
New Jersey and is licensed or qualified as a foreign corporation in all states
or foreign countries and provinces in which the nature of Ad Pads's business or
the character or ownership of Ad Pads properties makes such licensing or
qualification necessary.
4.4 Financial Statements. The financial statements of Ad Pads furnished
to Regents, consisting of an audited balance sheet as of December 31, 1999, and
a related income statement for the period January 1, 1999 through December 31,
1999, attached hereto as Exhibit E and incorporated herein by reference, are
correct and fairly present the financial condition of Ad Pads as of these dates
and for the periods involved, and such statements were prepared in accordance
with generally accepted accounting principles consistently applied, and no
material change has occurred in the matters disclosed therein, except as
indicated in Exhibit F, which is attached hereto and incorporated herein by
reference. The Ad Pads Assets are properly booked on the balance sheet of Ad
Pads in accordance with generally accepted accounting principals. These
financial statements do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
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4.5 Confidentiality. Until the Closing (and continuously if there is no
Closing), Ad Pads and its representatives will keep confidential any information
which they obtain from Regents concerning its properties, assets and business.
If the transactions contemplated by this Agreement are not consummated by March
31, 2000, Ad Pads will return to Regents all written matter with respect to
Regents obtained by them in connection with the negotiation or consummation of
this Agreement.
4.6 Investment Intent. Ad Pads is acquiring the shares to be exchanged
and delivered to it under this Agreement for investment and not with a view to
the sale or distribution thereof, and Ad Pads has no commitment or present
intention to liquidate Regents or to sell or otherwise dispose of the Regents
shares. Ad Pads shall execute and deliver to Regents on the Closing an
Investment Letter attached hereto as Exhibit G and incorporated herein by
reference, acknowledging the "unregistered" and "restricted" nature of the
shares of Regents being received under the Agreement in exchange for the Ad Pads
Assets and receipt of certain material information regarding Regents.
4.7 Corporate Authority. Ad Pads has full power and authority to enter
into this Agreement and to carry out its obligations hereunder and will deliver
to Regents or its representative at the Closing a certified copy of resolutions
of its Board of Managers authorizing execution of this Agreement by its officers
and performance thereunder.
4.8 Due Authorization. Execution of this Agreement and performance by
Ad Pads hereunder have been duly authorized by all requisite action on the part
of Ad Pads, and this Agreement constitutes a valid and binding obligation of Ad
Pads and performance hereunder will not violate any provision of the agreements,
mortgages or other commitments of Ad Pads. With the exception of consents of its
members/interest holders or its Board of Managers, as may be required by
applicable law, no consents or authorizations of any type or nature whatsoever
are required to convey the Ad Pads Assets to Regents.
4.9 Access to Information Regarding Regents. Ad Pads acknowledges that
it has been delivered copies of what has been represented to be documentation
containing all material information respecting Regents and its present and
contemplated business operations, potential acquisitions, management and other
factors; that it has had a reasonable opportunity to review such documentation
and discuss it, to the extent desired, with its legal counsel, directors and
executive officers; that it has had, to the extent desired, the opportunity to
ask questions of and receive responses from the directors and executive officers
of Regents, and with the legal and accounting firms of Regents, with respect to
such documentation; and that to the extent requested, all questions raised have
been answered to its complete satisfaction.
Section 5
Conditions Precedent to Obligations of Ad Pads
All obligations of Ad Pads under this Agreement are subject, at their
option, to the fulfillment, before or at the Closing, of each of the following
conditions:
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5.1 Representations and Warranties True at Closing. The representations
and warranties of Regents contained in this Agreement shall be deemed to have
been made again at and as of the Closing and shall then be true in all material
respects and shall survive the Closing.
5.2 Due Performance. Regents shall have performed and complied with all
of the terms and conditions required by this Agreement to be performed or
complied with by it before the Closing.
5.3 Officers' Certificate. Ad Pads shall have been furnished with a
certificate signed by the President of Regents, in such capacity, attached
hereto as Exhibit H and incorporated herein by reference, dated as of the
Closing, certifying (1) that all representations and warranties of Regents
contained herein are true and correct; and (2) that since the date of the
financial statements (Exhibit C hereto), there has been no material adverse
change in the financial condition, business or properties of Regents, taken as a
whole.
5.4 Assets and Liabilities of Regents. Unless otherwise agreed, Regents
shall have no assets and no liabilities at Closing, and all costs, expenses and
fees incident to the Agreement shall have been paid or provided for..
5.5 Resignation of Directors and Executive Officers and Designation of
New Directors and Executive Officers. The present directors and executive
officers of Regents shall have designated nominees of Ad Pads as outlined in
Section 1.4 hereof as directors and executive officers of Regents to serve in
their place and stead, until the next respective annual meetings of the
stockholders and Board of Directors of Regents, and until their respective
successors shall be elected and qualified or until their respective prior
resignations or terminations; and then, such directors and executive officers of
Regents shall resign, in seriatim.
5.7 Name Change and Change of Domicile. Following the Closing of this
Agreement, Regents shall amend its Articles of Incorporation to change its name
to "Ad Pads Incorporated" or some similar name selected by the newly designated
and constituted Board of Directors of Regents and to change its domicile from
the State of Colorado to the State of Delaware.
Section 6
Conditions Precedent to Obligations of Regents
All obligations of Regents under this Agreement are subject, at
Regents' option, to the fulfillment, before or at the Closing, of each of the
following conditions:
6.1 Representations and Warranties True at Closing. The representations
and warranties of Ad Pads contained in this Agreement shall be deemed to have
been made again at and as of the Closing and shall then be true in all material
respects and shall survive the Closing.
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6.2 Due Performance. Ad Pads shall have performed and complied with all
of the terms and conditions required by this Agreement to be performed or
complied with by them before the Closing.
6.3 Officers' Certificate. Regents shall have been furnished with a
certificate signed by the President of Ad Pads, in such capacity, attached
hereto as Exhibit I and incorporated herein by reference, dated as of the
Closing, certifying (1) that all representations and warranties of Ad Pads
contained herein are true and correct; and (2) that since the date of the
financial statements (Exhibit E), there has been no material adverse change in
the financial condition, business or properties of Ad Pads, taken as a whole.
6.4 Prior Issued Common Stock of Regents. All pre-Agreement outstanding
common stock of Regents shall not be subject to any challenge by Ad Pads or the
newly designated directors and executive officers regarding the authorization,
issuance or fully paid status thereof or otherwise, as Closing of this Agreement
shall be evidence of their satisfaction of the lawful issuance of these
securities, based upon the representations of Regents set forth in Section 3.2
hereof.
Section 7
Termination
Prior to Closing, this Agreement may be terminated (1) by mutual
consent in writing; (2) by either the directors of Regents or the managers of Ad
Pads if there has been a material misrepresentation or material breach of any
warranty or covenant by the other party; or (3) by either the directors of
Regents or the managers of Ad Pads if the Closing shall not have taken place,
unless adjourned to a later date by mutual consent in writing, by the date fixed
in Section 2.
Section 8
General Provisions
8.1 Further Assurances. At any time, and from time to time, after the
Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
8.2 Waiver. Any failure on the part of any party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties hereunder that
no broker or finder has acted for it in connection with this Agreement, and
agrees to indemnify and hold harmless the other parties against any fee, loss or
expense arising out of claims by brokers or finders employed or alleged to have
been employed by it.
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8.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class registered or certified mail, return receipt requested, as
follows:
Regents: 0000 Xxxxx Xxxx Xxxx, Xxxxx 0-X
Xxxxxxxxxx, Xxxxxxxx 00000
With a copy
to: Xxxxxxx X. Xxxxxxxxxx, Esq
Suite 205, 000 X. 000 X.
Xxxx Xxxx Xxxx, XX 00000
Ad Pads: 0000 Xxxxxxx 00
Xxxxxxx, Xxx Xxxxxx 00000
With a copy
to. Xxxxxx Xxxxxxx, Esq.
0000 Xxxxx Xxxxxxx #00
Xxxxxxxxxxx, Xxx Xxxxxx 00000
8.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
8.6 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.7 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Utah; except for
corporate matters, which shall be governed by the laws of the State of Colorado;
and except to the extent pre-empted by federal law, in which event (and to that
extent only), federal law shall govern; all actions to enforce this Agreement
shall be brought in the courts of the State of Utah or the United States
District Courts situated in the State of Utah, only.
8.8 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns.
8.9 Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.10 Default. In the event of any default hereunder, the prevailing
party in any action to enforce the terms and provisions hereof shall be entitled
to recover reasonable attorney's fees and related costs.
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement effective the day and year first above written.
REGENTS ROAD, LTD.
By_________________________________
Xxxxxxx X. Xxxxxxx, President
AD PADS, INCORPORATED
By_________________________________
Xxxxx X. Xxxxxxxxxx, President
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