SHARE EXCHANGE AGREEMENT by and among PRINCETON ACQUISITIONS, INC., HUNTER BATES MINING CORPORATION
Exhibit
2.1
by
and among
PRINCETON
ACQUISITIONS, INC.,
XXXXXX
XXXXX MINING CORPORATION
and
THE
SHAREHOLDERS OF XXXXXX XXXXX MINING CORPORATION
NAMED
HEREIN
Dated
as of September 11, 2009
TABLE OF
CONTENTS
ARTICLE
I EXCHANGE OF SHARES
|
1
|
|
1.1.
|
Exchange
by the Shareholders
|
1
|
1.2.
|
Closing
|
2
|
ARTICLE
II REPRESENTATIONS AND WARRANTIES OF XXXXXX XXXXX
|
2
|
|
2.1.
|
Organization,
Standing and Power
|
2
|
2.2.
|
Xxxxxx
Xxxxx Subsidiaries; Equity Interests
|
2
|
2.3.
|
Capital
Structure
|
3
|
2.4.
|
Authority;
Execution and Delivery; Enforceability
|
3
|
2.5.
|
No
Conflicts; Consents
|
3
|
2.6.
|
Taxes
|
4
|
2.7.
|
Benefit
Plans.
|
4
|
2.8.
|
Litigation
|
4
|
2.9.
|
Compliance
with Applicable Laws
|
4
|
2.10.
|
Brokers;
Schedule of Fees and Expenses
|
4
|
2.11.
|
Contracts
|
5
|
2.12.
|
Title
to Properties
|
5
|
2.13.
|
Intellectual
Property
|
5
|
2.14.
|
Labor
Matters
|
5
|
2.15.
|
Financial
Statements
|
5
|
2.16.
|
Transactions
with Affiliates and Employees
|
5
|
2.17.
|
Application
of Takeover Protections
|
6
|
2.18.
|
No
Additional Agreements
|
6
|
2.19.
|
Investment
Company
|
6
|
2.20.
|
Disclosure
|
6
|
2.21.
|
Information
Supplied
|
6
|
2.22.
|
Absence
of Certain Changes or Events
|
6
|
2.23.
|
Foreign
Corrupt Practices
|
7
|
ARTICLE
III REPRESENTATIONS AND WARRANTIES OF PRINCETON
ACQUISITIONS
|
7
|
|
3.1.
|
Organization,
Standing and Power
|
7
|
3.2.
|
Subsidiaries;
Equity Interests
|
8
|
3.3.
|
Capital
Structure
|
8
|
3.4.
|
Authority;
Execution and Delivery; Enforceability
|
8
|
3.5.
|
No
Conflicts; Consents
|
9
|
3.6.
|
SEC
Documents; Undisclosed Liabilities
|
9
|
3.7.
|
Information
Supplied
|
10
|
3.8.
|
Absence
of Certain Changes or Events
|
10
|
3.9.
|
Taxes
|
11
|
3.10.
|
Absence
of Changes in Benefit Plans
|
12
|
3.11.
|
ERISA
Compliance; Excess Parachute Payments
|
12
|
3.12.
|
Litigation
|
12
|
3.13.
|
Real
Property
|
12
|
3.14.
|
Environmental
Matters
|
12
|
3.15.
|
Compliance
with Applicable Laws
|
12
|
3.16.
|
Business
Activities
|
13
|
3.17.
|
Contracts
|
13
|
3.18.
|
Title
to Properties
|
13
|
3.19.
|
Intellectual
Property
|
13
|
3.20.
|
Labor
Matters
|
13
|
3.21.
|
Market
Makers
|
13
|
3.22.
|
Transactions
With Affiliates and Employees
|
13
|
3.23.
|
Internal
Accounting Controls
|
14
|
3.24.
|
Application
of Takeover Protections
|
14
|
3.25.
|
No
Additional Agreements
|
14
|
3.26.
|
Investment
Company
|
14
|
3.27.
|
Disclosure
|
14
|
3.28.
|
Certain
Registration Matters
|
14
|
3.29.
|
Listing
and Maintenance Requirements
|
14
|
3.30.
|
No
Undisclosed Events, Liabilities, Developments or
Circumstances
|
15
|
3.31.
|
Foreign
Corrupt Practices
|
15
|
ARTICLE
IV DELIVERIES
|
15
|
|
4.1.
|
Deliveries
of the Shareholders
|
15
|
4.2.
|
Deliveries
of Princeton Acquisitions
|
15
|
4.3.
|
Deliveries
of Xxxxxx Xxxxx
|
16
|
ARTICLE
V CONDITIONS TO CLOSING
|
17
|
|
5.1.
|
Shareholders
and Xxxxxx Xxxxx Conditions Precedent
|
17
|
5.2.
|
Princeton
Acquisitions Conditions Precedent
|
18
|
ARTICLE
VI COVENANTS AND OTHER AGREEMENTS
|
19
|
|
6.1.
|
Preparation
of the 14f-1 Notice; Blue Sky Laws
|
19
|
6.2.
|
Public
Announcements
|
20
|
6.3.
|
Fees
and Expenses
|
20
|
6.4.
|
Continued
Efforts
|
20
|
6.5.
|
Exclusivity
|
20
|
6.6.
|
Filing
of 8-K and Press Release
|
20
|
6.7.
|
Preservation
of Business
|
20
|
6.8.
|
Due
Diligence; Access to Information; Confidentiality
|
21
|
6.9.
|
Covenant
of Further Assurance
|
22
|
6.10.
|
Financing
|
22
|
6.11.
|
Deposit
|
22
|
ARTICLE
VII TERMINATION
|
22
|
|
7.1.
|
Termination
|
22
|
ARTICLE
VIII EXCHANGE OF SHARES
|
23
|
|
8.1.
|
Exchange
of Shares
|
23
|
8.2.
|
Non-Registration;
Legend
|
23
|
ii
ARTICLE
IX MISCELLANEOUS
|
24
|
|
9.1.
|
Notices
|
24
|
9.2.
|
Amendments;
Waivers; No Additional Consideration
|
25
|
9.3.
|
Replacement
of Securities
|
25
|
9.4.
|
Remedies
|
25
|
9.5.
|
Limitation
of Liability
|
25
|
9.6.
|
Interpretation
|
25
|
9.7.
|
Severability
|
25
|
9.8.
|
Counterparts;
Facsimile Execution
|
25
|
9.9.
|
Entire
Agreement; Third Party Beneficiaries
|
26
|
9.10.
|
Governing
Law
|
26
|
9.11.
|
Assignment
|
26
|
Annex
A Xxxxxx Xxxxx
Shareholders
iii
This
Share Exchange Agreement (this “Agreement”), dated as
of September 11, 2009 is by and among Princeton Acquisitions, Inc., a Colorado
corporation (“Princeton
Acquisitions”), Xxxxxx Xxxxx Mining Corporation (“Xxxxxx Xxxxx”), and
the shareholders of Xxxxxx Xxxxx identified on Annex A hereto (the
“Shareholder(s)”). Each
of the parties to this Agreement is individually referred to herein as a “Party” and are
collectively, the “Parties.”
BACKGROUND
As of the
date hereof, 100% of the capital stock of Xxxxxx Xxxxx issued and outstanding
(the “Xxxxxx Xxxxx
Stock”) is owned and held by Wits Basin Precious Minerals Inc., a
Minnesota corporation (“Wits
Basin”). Prior to the Effective Time (as defined herein),
Xxxxxx Xxxxx contemplates completing a private placement offering of up to
3,000,000 shares of its common stock and 3,000,000 warrants to purchase shares
of its common stock, after which (assuming a maximum offering) Xxxxxx Xxxxx
anticipates having approximately 21,500,000 shares of capital stock issued and
outstanding and held by the shareholders of Xxxxxx Xxxxx (actual shares held as
of Effective Time being referred to herein as the “Shareholders Stock”)
and an additional 4,500,000 shares issuable upon exercise of outstanding
warrants. The Shareholders have agreed to transfer each share of
Shareholders Stock (and each right to acquire a share of Shareholders Stock) to
Princeton Acquisitions in exchange for one newly issued share of common stock of
Princeton Acquisitions (the “Princeton Acquisitions
Stock”) (and right to acquire a share of Princeton Acquisitions Stock, as
applicable), and as a result the shareholders of Xxxxxx Xxxxx immediately prior
to the Effective Time will hold approximately 99% of the issued and outstanding
capital stock of Princeton Acquisitions on a fully-diluted basis as of and
immediately after the Effective Time (assuming a maximum
offering). The number of shares of Princeton Acquisitions Stock to be
received by the Shareholders are listed on Annex A and are
referred to herein as the “Shares.” The
transaction shall be referred to as the “Share
Exchange.”
The
exchange of the Shareholders Stock for Princeton Acquisitions Stock is intended
to constitute a reorganization within the meaning of Section 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended, or such other tax free
reorganization exemptions that may be available under such code.
The Board
of Directors of Princeton Acquisitions and Xxxxxx Xxxxx have each determined
that it is desirable to effect this plan of reorganization and share
exchange.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth herein, and intending to be
legally bound hereby, the Parties agree as follows:
ARTICLE
I
Exchange of
Shares
1.1. Exchange by the
Shareholders. At
the Effective Time, and subject to the terms and conditions herein, the
Shareholders shall sell, transfer, convey, assign and deliver to Princeton
Acquisitions the Shareholders Stock, free and clear of all Liens, in exchange
for fully paid and nonassessable shares of Princeton Acquisitions Stock on a
one-for-one basis (collectively, the Princeton Acquisitions Stock issued
hereunder shall be referred to herein as the “Shares”). Further,
at the Effective Time, all securities convertible into or exchangeable for
shares of Xxxxxx Xxxxx Stock (including without limitation warrants to purchase
shares of Xxxxxx Xxxxx Stock) outstanding immediately prior to the Effective
Time (the “Xxxxxx
Xxxxx Derivative Securities”) shall automatically convert into and be
exchanged for securities convertible into or exchangeable for that number of
shares of Princeton Acquisitions Stock.
1
1.2. Closing. The
closing (the “Closing”) of the
transactions contemplated hereby (the “Transactions”) shall
take place at the offices of Xxxxxx Xxxxxxx Xxxxxx & Brand, LLP in
Minneapolis, Minnesota, commencing at 9:00 a.m. local time on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the Transactions (other than conditions
with respect to actions that the respective parties will take at Closing) or
such other date and time as the Parties may mutually determine (the “Closing
Date”). To the extent required under applicable law, on the
Closing Date, or as soon thereafter as reasonably practicable, the Parties will
cause a Statement of Share Exchange to be filed with the Colorado Secretary of
State and an Articles of Exchange to be filed with the Minnesota Secretary of
State, and the Share Exchange shall be effective at such time necessary filings
are made, or such later time the parties agree as specified in such filings (the
“Effective
Time” or “Effective
Date”).
ARTICLE
II
Representations and
Warranties of Xxxxxx Xxxxx
Subject
to the exceptions set forth in the disclosure letter delivered from Xxxxxx Xxxxx
to Princeton Acquisitions on the date hereof (the “Xxxxxx Xxxxx Disclosure
Letter”) (regardless of whether or not the Xxxxxx Xxxxx Disclosure Letter
is referenced below with respect to any particular representation or warranty),
Xxxxxx Xxxxx represents and warrants as follows to Princeton
Acquisitions.
2.1. Organization, Standing and
Power. Xxxxxx
Xxxxx is duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it is organized and has the corporate power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets and to conduct its businesses as presently
conducted, other than such franchises, licenses, permits, authorizations and
approvals the lack of which, individually or in the aggregate, has not had and
would not reasonably be expected to have a material adverse effect on Xxxxxx
Xxxxx, a material adverse effect on the ability of Xxxxxx Xxxxx to perform its
obligations under this Agreement or on the ability of Xxxxxx Xxxxx to consummate
the Transactions (a “Xxxxxx Xxxxx Material
Adverse Effect”). Xxxxxx Xxxxx is duly qualified to do
business in each jurisdiction where the nature of its business or its ownership
or leasing of its properties make such qualification necessary except where the
failure to so qualify would not reasonably be expected to have a Xxxxxx Xxxxx
Material Adverse Effect. Xxxxxx Xxxxx has delivered to Princeton
Acquisitions true and complete copies of its articles of incorporation and
bylaws (collectively, the “Xxxxxx Xxxxx Constituent
Instruments”), in each case as amended through the date of this
Agreement.
2.2. Xxxxxx Xxxxx Subsidiaries;
Equity Interests. Xxxxxx
Xxxxx does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
in any person or entity. Xxxxxx Xxxxx is in the process of obtaining
from Wits Basin 100% of the equity interest of Xxxxxxx Gold Producers, Inc., a
Colorado corporation.
2
2.3. Capital
Structure. The
authorized capital stock of Xxxxxx Xxxxx as of the date hereof consists of
100,000,000 shares, par value US$.01 per share, of which 18,500,000 shares of
common stock are issued and outstanding. Additionally, there are
outstanding warrants to purchase an aggregate of 1,500,000 shares of Xxxxxx
Xxxxx’ common stock at an exercise price of $0.01 per share. Prior to
the Effective Time, Xxxxxx Xxxxx anticipates completing a private placement
offering (the “Initial Financing”), whereby, in the event of a maximum offering,
Xxxxxx Xxxxx would have 26,000,000 shares of common stock issued and
outstanding, on a fully diluted basis. Except for the Initial
Financing or as otherwise set forth herein, no shares of capital stock or other
voting securities of Xxxxxx Xxxxx are issued, reserved for issuance or
outstanding as of the date of this Agreement. All outstanding shares
of the capital stock of Xxxxxx Xxxxx are duly authorized, validly issued, fully
paid and nonassessable and not subject to or issued in violation of any purchase
option, call option, right of first refusal, preemptive right, subscription
right or any similar right under any provision of the applicable corporate laws
of the State of Minnesota, the Xxxxxx Xxxxx Constituent Instruments or any
contract, lease, license, indenture, note, bond, agreement, permit, concession,
franchise or other instrument (each, a “Contract”) to which
Xxxxxx Xxxxx is a party or otherwise bound. There are not any bonds,
debentures, notes or other indebtedness of Xxxxxx Xxxxx or any of its
subsidiaries having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which holders of the
Xxxxxx Xxxxx capital stock may vote. Except with respect to the
Initial Financing or as set forth in the Xxxxxx Xxxxx Disclosure Letter, as of
the date of this Agreement, there are not any options, warrants, rights,
convertible or exchangeable securities, “phantom” stock rights, stock
appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which Xxxxxx Xxxxx is a party or is
bound (a) obligating Xxxxxx Xxxxx to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, Xxxxxx Xxxxx, (b)
obligating Xxxxxx Xxxxx to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, Contract, arrangement or undertaking
or (c) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights occurring to holders
of the capital stock of Xxxxxx Xxxxx. As of the date of this
Agreement, there are not any outstanding contractual obligations of Xxxxxx Xxxxx
to repurchase, redeem or otherwise acquire any shares of capital stock of Xxxxxx
Xxxxx.
2.4. Authority; Execution and
Delivery; Enforceability. Xxxxxx
Xxxxx has all requisite corporate power and authority to execute and deliver
this Agreement and to consummate the Transactions. The execution and
delivery by Xxxxxx Xxxxx of this Agreement and the consummation by Xxxxxx Xxxxx
of the Transactions have been duly authorized and approved by the Board of
Directors and shareholders of Xxxxxx Xxxxx and no other corporate proceedings on
the part of Xxxxxx Xxxxx are necessary to authorize this Agreement and the
Transactions. When executed and delivered, this Agreement will be
enforceable against Xxxxxx Xxxxx in accordance with its terms.
2.5. No Conflicts;
Consents.
(a) Except
as noted in the Xxxxxx Xxxxx Disclosure Letter, the execution and delivery by
Xxxxxx Xxxxx of this Agreement does not, and the consummation of the
Transactions and compliance with the terms hereof will not, conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any Lien upon any of the properties or assets of Xxxxxx Xxxxx
under, any provision of (i) the Xxxxxx Xxxxx Constituent Instruments, (ii)
subject to the Xxxxxx Xxxxx Consents (as defined in Section 5.1(n)
hereof), any Contract to which Xxxxxx Xxxxx is a party or by which its
properties or assets is bound, or (iii) subject to the filings and other matters
referred to in Section 2.5(b),
any material judgment, order or decree or material Law applicable to Xxxxxx
Xxxxx or its properties or assets, other than, in the case of clauses (ii) and
(iii) above, any such items that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Xxxxxx Xxxxx Material Adverse
Effect.
3
(b) Except
with respect to the filings set forth in Section 1.2 (if applicable), and for
required filings with the Securities and Exchange Commission (the “SEC”) and under
applicable “Blue Sky” or state securities commissions, no material consent,
approval, license, permit, order or authorization (each, a “Consent”) of, or
registration, declaration or filing with, or permit from, any federal, state,
local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (each, a “Governmental Entity”)
is required to be obtained or made by or with respect to Xxxxxx Xxxxx in
connection with the execution, delivery and performance of this Agreement or the
consummation of the Transactions.
2.6. Taxes. As
of the date of this Agreement, Xxxxxx Xxxxx does not file federal, state or
local tax returns as a stand alone entity, rather, all federal, state, local,
declarations, statements, reports, schedules, forms and information returns
taxes (collectively, the “Tax Returns”)
required to be filed by it are filed by Wits Basin under the consolidated
corporation tax return process. Wits Basin has not yet filed its 2008
U.S. Consolidated Corporation Income Tax Return. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of Xxxxxx Xxxxx know of no basis for any such
claim.
2.7. Benefit
Plans.Xxxxxx
Xxxxx does not have or maintain any collective bargaining agreement or any
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical or
other plan, arrangement or understanding (whether or not legally binding)
providing benefits to any current or former employee, officer or director of
Xxxxxx Xxxxx (collectively, “Xxxxxx Xxxxx Benefit
Plans”). As of the date of this Agreement there are not any
severance or termination agreements or arrangements between Xxxxxx Xxxxx and any
current or former employee, officer or director of Xxxxxx Xxxxx, nor does Xxxxxx
Xxxxx have any general severance plan or policy.
2.8. Litigation. There
is no action, suit, inquiry, notice of violation, proceeding (including any
partial proceeding such as a deposition) or investigation pending or threatened
in writing before or by any court, arbitrator, governmental or administrative
agency, regulatory authority (federal, state, county, local or foreign), stock
market, stock exchange or trading facility (each, an “Action”) against or
affecting Xxxxxx Xxxxx or any of its properties which (a) adversely affects or
challenges the legality, validity or enforceability of any of this Agreement or
the Shares or (b) could, if there were an unfavorable decision, individually or
in the aggregate, have or reasonably be expected to result in a Xxxxxx Xxxxx
Material Adverse Effect. Neither Xxxxxx Xxxxx, nor any director or
officer thereof (in his or her capacity as such), is or has been the subject of
any Action involving a claim or violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.
2.9. Compliance with Applicable
Laws. To
the knowledge of Xxxxxx Xxxxx, Xxxxxx Xxxxx is in compliance with all applicable
statutes, laws, ordinances, rules, regulations, orders, writs, injunctions,
judgments, or decrees (collectively, “Laws”), including
those relating to occupational health and safety and the environment, except for
instances of noncompliance that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Xxxxxx Xxxxx Material Adverse
Effect. Xxxxxx Xxxxx has not received any written communication
during the past two years from a Governmental Entity that alleges that Xxxxxx
Xxxxx is not in compliance in any material respect with any applicable
Law. This Section 2.9 does
not relate to matters with respect to Taxes, which are the subject of Section 2.6.
2.10. Brokers; Schedule of Fees
and Expenses. Except
as noted in the Xxxxxx Xxxxx Disclosure Letter, no broker, investment banker,
financial advisor or other person is entitled to any broker’s, finder’s,
financial advisor’s or other similar fee or commission in connection with the
Transactions based upon arrangements made by or on behalf of Xxxxxx
Xxxxx.
4
2.11. Contracts. Except
as disclosed in the Xxxxxx Xxxxx Disclosure Letter, there are no Contracts that
are material to the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of Xxxxxx
Xxxxx. Xxxxxx Xxxxx is not in violation of or in default under (nor
does there exist any condition which upon the passage of time or the giving of
notice would cause such a violation of or default under) any Contract to which
it is a party or by which it or any of its properties or assets is bound, except
for violations or defaults that would not, individually or in the aggregate,
reasonably be expected to result in a Xxxxxx Xxxxx Material Adverse
Effect.
2.12. Title to
Properties. Except
as set forth in the Xxxxxx Xxxxx Disclosure Letter, Xxxxxx Xxxxx does not own
any real property, and to the best of its knowledge, Xxxxxx Xxxxx has sufficient
title to, or valid leasehold interests in, all of its properties and assets used
in the conduct of its businesses. Except as noted in the Xxxxxx Xxxxx
Disclosure Letter, all such assets and properties, other than assets and
properties in which Xxxxxx Xxxxx has leasehold interests, are free and clear of
any liens, security interest, pledge, equity or claim of any kind, voting trust,
stockholder agreement and other encumbrance (collectively, “Liens”) other than
those set forth in the Xxxxxx Xxxxx Disclosure Letter and except for Liens that,
in the aggregate, do not and will not materially interfere with the ability of
Xxxxxx Xxxxx to conduct business as currently conducted.
2.13. Intellectual
Property. Xxxxxx
Xxxxx owns, or is validly licensed or otherwise has the right to use, all
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service xxxx rights, copyrights and other proprietary
intellectual property rights and computer programs (the “Intellectual Property
Rights”) which are material to the conduct of the business of Xxxxxx
Xxxxx. The Xxxxxx Xxxxx Disclosure Letter sets forth a description of
all Intellectual Property Rights that are material to the conduct of the
business of Xxxxxx Xxxxx. There are no claims pending or, to the
knowledge of Xxxxxx Xxxxx, threatened that Xxxxxx Xxxxx is infringing or
otherwise adversely affecting the rights of any person with regard to any
Intellectual Property Right. To the knowledge of Xxxxxx Xxxxx, no
person is infringing the rights of Xxxxxx Xxxxx with respect to any Intellectual
Property Right.
2.14. Labor
Matters. There
are no collective bargaining or other labor union agreements to which Xxxxxx
Xxxxx is a party or by which any of them is bound. No material labor
dispute exists or, to the knowledge of Xxxxxx Xxxxx, is imminent with respect to
any of the employees of Xxxxxx Xxxxx.
2.15. Financial
Statements. Xxxxxx Xxxxx has
delivered to Princeton Acquisitions its unaudited financial statements for the
fiscal year ended December 31, 2008 and its unaudited financial statements for
the fiscal quarter ended June 30, 2009 (collectively, the “Xxxxxx Xxxxx Financial
Statements”). The Xxxxxx Xxxxx Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated. The Xxxxxx Xxxxx
Financial Statements fairly present in all material respects the financial
condition and operating results of Xxxxxx Xxxxx, as of the dates, and for the
periods, indicated therein. Xxxxxx Xxxxx does not have any material
liabilities or obligations, contingent or otherwise, other than
(a) liabilities incurred in the ordinary course of business subsequent to
June 30, 2009, and (b) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the Xxxxxx Xxxxx Financial Statements,
which, in both cases, individually and in the aggregate, would not be reasonably
expected to result in a Xxxxxx Xxxxx Material Adverse Effect.
2.16. Transactions with Affiliates
and Employees. Except
as set forth in the Xxxxxx Xxxxx Disclosure Letter and the Xxxxxx Xxxxx
Financial Statements, none of the officers or directors of Xxxxxx Xxxxx and, to
the knowledge of Xxxxxx Xxxxx, none of the employees of Xxxxxx Xxxxx is
presently a party to any transaction with Xxxxxx Xxxxx (other than for services
as employees, officers and directors), including any Contract or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of Xxxxxx
Xxxxx, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or
partner.
5
2.17. Application of Takeover
Protections. Xxxxxx
Xxxxx has taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Xxxxxx Xxxxx Constituent Instruments or the laws of its jurisdiction
of organization that is or could become applicable to the Shareholders as a
result of the Shareholders and Xxxxxx Xxxxx fulfilling their obligations or
exercising their rights under this Agreement, including, without limitation, the
issuance of the Shares and the Shareholders’ ownership of the
Shares.
2.18. No Additional
Agreements. Except
as noted in the Xxxxxx Xxxxx Disclosure Letter, Xxxxxx Xxxxx does not have any
agreement or understanding with the Shareholders with respect to the
Transactions other than as specified in this Agreement.
2.19. Investment
Company. Xxxxxx
Xxxxx is not, and is not an affiliate of, and immediately following the
Effective Time will not have become, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.
2.20. Disclosure. Xxxxxx
Xxxxx confirms that neither it nor any person acting on its behalf has provided
the Shareholders or its respective agents or counsel with any information that
Xxxxxx Xxxxx believes constitutes material, non-public information except
insofar as the existence and terms of the Transactions may constitute such
information and except for information that will be disclosed by Princeton
Acquisitions under a current report on Form 8-K filed no later than four (4)
business days after the Closing. Xxxxxx Xxxxx understands and
confirms that Princeton Acquisitions will rely on the foregoing representations
and covenants in effecting transactions in securities of Xxxxxx
Xxxxx. All the disclosures provided to Princeton Acquisitions
regarding Xxxxxx Xxxxx, its business and the Transactions, furnished by or on
behalf of Xxxxxx Xxxxx (including Xxxxxx Xxxxx’ representations and warranties
set forth in this Agreement) are true and correct and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
2.21. Information
Supplied. None
of the information supplied or to be supplied by Xxxxxx Xxxxx for inclusion or
incorporation by reference in the notice that is required to be sent to the
stockholders of Princeton Acquisitions pursuant to Rule 14f-1 (the “14f-1 Notice”)
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) will,
at the date it is first mailed to the Princeton Acquisitions’ stockholders,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
2.22. Absence of Certain Changes
or Events. Except
as disclosed in the Xxxxxx Xxxxx Financial Statements or in the Xxxxxx Xxxxx
Disclosure Letter, from December 31, 2008 to the date of this Agreement, Xxxxxx
Xxxxx has conducted its business only in the ordinary course, and during such
period there has not been:
(a) any
change in the assets, liabilities, or financial condition of Xxxxxx Xxxxx,
except changes in the ordinary course of business that have not caused, in the
aggregate, a Xxxxxx Xxxxx Material Adverse Effect;
(b) any
damage, destruction or loss, whether or not covered by insurance, that would
have a Xxxxxx Xxxxx Material Adverse Effect;
(c) any
waiver or compromise by Xxxxxx Xxxxx of a valuable right or of a material debt
owed to it;
6
(d) any
satisfaction or discharge of any lien, claim, or encumbrance or payment of any
obligation by Xxxxxx Xxxxx, except in the ordinary course of business and the
satisfaction or discharge of which would not have a Xxxxxx Xxxxx Material
Adverse Effect;
(e) any
material change to a material Contract by which Xxxxxx Xxxxx or any of its
assets is bound or subject;
(f) any
mortgage, pledge, transfer of a security interest in, or lien, created by Xxxxxx
Xxxxx, with respect to any of its material properties or assets, except liens
for taxes not yet due or payable and liens that arise in the ordinary course of
business and do not materially impair Xxxxxx Xxxxx’ ownership or use of such
property or assets;
(g) any
loans or guarantees made by Xxxxxx Xxxxx to or for the benefit of its employees,
officers or directors, or any members of their immediate families, other than
travel advances and other advances made in the ordinary course of its
business;
(h) any
alteration of Xxxxxx Xxxxx’ method of accounting or the identity of its
auditors;
(i) any
declaration or payment of dividend or distribution of cash or other property to
the Shareholders or any purchase, redemption or agreements to purchase or redeem
any of the Shareholders Stock;
(j) any
issuance of equity securities to any officer, director or affiliate;
or
(k) any
arrangement or commitment by Xxxxxx Xxxxx to do any of the things described in
this Section 2.22.
2.23. Foreign Corrupt
Practices. Neither
Xxxxxx Xxxxx, nor, to Xxxxxx Xxxxx’ knowledge, any director, officer, agent,
employee or other person acting on behalf of Xxxxxx Xxxxx, has, in the course of
its actions for, or on behalf of, Xxxxxx Xxxxx (a) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (b) made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate funds;
(c) violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or (d) made any unlawful bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
ARTICLE
III
Representations and
Warranties of Princeton Acquisitions
Princeton
Acquisitions represents and warrants as follows to the Shareholders and Xxxxxx
Xxxxx.
3.1. Organization, Standing and
Power. Princeton
Acquisitions is duly organized, validly existing and in good standing under the
laws of the State of Colorado and has full corporate power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or otherwise hold its properties
and assets and to conduct its businesses as presently conducted, other than such
franchises, licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a material adverse effect on Princeton Acquisitions, a material
adverse effect on the ability of Princeton Acquisitions to perform its
obligations under this Agreement or on the ability of Princeton Acquisitions to
consummate the Transactions (a “Princeton Acquisitions
Material Adverse Effect”). Princeton Acquisitions is duly
qualified to do business in each jurisdiction where the nature of its business
or its ownership or leasing of its properties makes such qualification necessary
and where the failure to so qualify would reasonably be expected to have a
Princeton Acquisitions Material Adverse Effect. Princeton
Acquisitions has delivered to Xxxxxx Xxxxx true and complete copies of its
Articles of Incorporation (“Princeton Acquisitions
Charter”) and Bylaws (the “Princeton Acquisitions
Bylaws”), each as amended to the date of this Agreement.
7
3.2. Subsidiaries; Equity
Interests. Princeton
Acquisitions does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
in any person.
3.3. Capital
Structure. The
authorized capital stock of Princeton Acquisitions consists of 100,000,000
shares of common stock, par value $0.001 per share, and 50,000,000 shares of
preferred stock, par value $1.00 per share. As of the date hereof (a)
1,710,649 shares of Princeton Acquisitions’ common stock are issued and
outstanding, (b) no shares of preferred stock are outstanding and (c) no shares
of Princeton Acquisitions’ common stock or preferred stock are held by Princeton
Acquisitions in its treasury. Except as set forth above, no shares of
capital stock or other voting securities of Princeton Acquisitions were issued,
reserved for issuance or outstanding. All outstanding shares of the
capital stock of Princeton Acquisitions are, and all such shares that may be
issued prior to the date hereof will be when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the Colorado
Business Corporation Act, the Princeton Acquisitions Charter, the Princeton
Acquisitions Bylaws or any Contract to which Princeton Acquisitions is a party
or otherwise bound. There are not any bonds, debentures, notes or
other indebtedness of Princeton Acquisitions having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of Princeton Acquisitions’ common stock may vote
(“Voting Princeton
Acquisitions Debt”). Except as described above, as of the date
of this Agreement, there are not any options, warrants, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which Princeton Acquisitions is a party or by which
it is bound (a) obligating Princeton Acquisitions to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other equity interests in, or any security convertible or exercisable for or
exchangeable into any capital stock of or other equity interest in, Princeton
Acquisitions or any Voting Princeton Acquisitions Debt, (b) obligating Princeton
Acquisitions to issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, Contract, arrangement or undertaking or (c)
that give any person the right to receive any economic benefit or right similar
to or derived from the economic benefits and rights occurring to holders of the
capital stock of Princeton Acquisitions. As of the date of this
Agreement, there are not any outstanding contractual obligations of Princeton
Acquisitions to repurchase, redeem or otherwise acquire any shares of capital
stock of Princeton Acquisitions. Princeton Acquisitions is not a
party to any agreement granting any securityholder of Princeton Acquisitions the
right to cause Princeton Acquisitions to register shares of the capital stock or
other securities of Princeton Acquisitions held by such securityholder under the
Securities Act. The stockholder list of Princeton Acquisitions
provided to Xxxxxx Xxxxx is a current stockholder list generated by Princeton
Acquisitions’ stock transfer agent, and such list accurately reflects all of the
issued and outstanding shares of the Princeton Acquisitions’ common
stock.
3.4. Authority; Execution and
Delivery; Enforceability. The
execution and delivery by Princeton Acquisitions of this Agreement and the
consummation by Princeton Acquisitions of the Transactions have been duly
authorized and approved by the Board of Directors of Princeton Acquisitions and
no other corporate proceedings on the part of Princeton Acquisitions are
necessary to authorize this Agreement and the Transactions. This
Agreement constitutes a legal, valid and binding obligation of Princeton
Acquisitions, enforceable against Princeton Acquisitions in accordance with the
terms hereof.
8
3.5. No Conflicts;
Consents.
(a) The
execution and delivery by Princeton Acquisitions of this Agreement does not, and
the consummation of Transactions and compliance with the terms hereof will not,
conflict with or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material benefit
under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any person under, or result in the creation of any Lien upon any
of the properties or assets of Princeton Acquisitions under, any provision of
(i) the Princeton Acquisitions Charter or Princeton Acquisitions Bylaws, (ii)
any material Contract to which Princeton Acquisitions is a party or by which any
of its properties or assets is bound or (iii) subject to the filings and other
matters referred to in Section 3.5(b),
any material judgment, order or decree or material Law applicable to Princeton
Acquisitions or its properties or assets, other than, in the case of clauses
(ii) and (iii) above, any such items that, individually or in the aggregate,
have not had and would not reasonably be expected to have a Princeton
Acquisitions Material Adverse Effect.
(b) Except
with respect to the filings set forth in Section 1.2 (if applicable), no Consent
of, or registration, declaration or filing with, or permit from, any
Governmental Entity is required to be obtained or made by or with respect to
Princeton Acquisitions in connection with the execution, delivery and
performance of this Agreement or the consummation of the Transactions, other
than the (i) filing with the SEC of a 14f-1 Notice and (ii) filing with the SEC
of reports under Sections 13 and 16 of the Exchange Act, and (iii) filings
under state “blue sky” laws, as may be required in connection with this
Agreement and the Transactions.
3.6. SEC Documents; Undisclosed
Liabilities.
(a) Princeton
Acquisitions has filed all reports, schedules, forms, statements and other
documents required to be filed by Princeton Acquisitions with the SEC since
November 1, 2007, pursuant to Sections 13(a), 14(a) and 15(d) of the
Exchange Act (the “Princeton Acquisitions SEC
Documents”).
(b) As
of its respective filing date, each Princeton Acquisitions SEC Document filed
since November 1, 2007, and to the best of Princeton Acquisitions’ knowledge,
each Princeton Acquisitions SEC Document filed prior to November 1, 2007, has
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder applicable to such
Princeton Acquisitions SEC Document, and did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to
the extent that information contained in any Princeton Acquisitions SEC Document
has been revised or superseded by a later Princeton Acquisitions SEC Document,
none of the Princeton Acquisitions SEC Documents contains any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
consolidated financial statements of Princeton Acquisitions included in the
Princeton Acquisitions SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by the rules and
regulations of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of Princeton Acquisitions and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods shown (subject, in the case
of unaudited statements, to normal year-end audit adjustments).
9
(c) Except
as set forth in the Princeton Acquisitions SEC Documents, Princeton Acquisitions
has no liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by U.S. generally accepted accounting
principles (“GAAP”) to be set
forth on a balance sheet of Princeton Acquisitions or in the notes
thereto. The Princeton Acquisitions SEC Documents set forth all
financial and contractual obligations and liabilities (including any obligations
to issue capital stock or other securities of the parent) due after the date
hereof. All liabilities of Princeton Acquisitions shall have been
paid off or otherwise satisfied in full as of the Closing.
3.7. Information
Supplied. None
of the information supplied or to be supplied by Princeton Acquisitions for
inclusion or incorporation by reference in the 14f-1 Notice will, at the date it
is first mailed to Princeton Acquisitions’ stockholders, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
3.8. Absence of Certain Changes
or Events. Except
as disclosed in the Princeton Acquisitions SEC Documents, from the date of the
most recent audited financial statements of Princeton Acquisitions included in
the Princeton Acquisitions SEC Documents (the “Princeton Acquisitions
Financial Statements”) to the date of this Agreement, Princeton
Acquisitions has conducted its business only in the ordinary course, and during
such period there has not been:
(a) any
change in the assets, liabilities, financial condition or operating results of
Princeton Acquisitions from that reflected in the Princeton Acquisitions SEC
Documents, except changes in the ordinary course of business that have not
caused, in the aggregate, a Princeton Acquisitions Material Adverse
Effect;
(b) any
damage, destruction or loss, whether or not covered by insurance, that would
have a Princeton Acquisitions Material Adverse Effect;
(c) any
waiver or compromise by Princeton Acquisitions of a valuable right or of a
material debt owed to it;
(d) any
satisfaction or discharge of any lien, claim, or encumbrance or payment of any
obligation by Princeton Acquisitions, except in the ordinary course of business
and the satisfaction or discharge of which would not have a Princeton
Acquisitions Material Adverse Effect;
(e) any
material change to a material Contract by which Princeton Acquisitions or any of
its assets is bound or subject;
(f)
any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;
(g) any
resignation or termination of employment of any officer of Princeton
Acquisitions;
10
(h) any
mortgage, pledge, transfer of a security interest in or lien created by
Princeton Acquisitions with respect to any of its material properties or assets,
except liens for taxes not yet due or payable and liens that arise in the
ordinary course of business and that do not materially impair Princeton
Acquisitions’ ownership or use of such property or assets;
(i)
any loans or guarantees made by Princeton Acquisitions to or for the benefit of
its employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the ordinary
course of its business;
(j)
any declaration, setting aside or payment of a dividend or other
distribution in respect of any of Princeton Acquisitions’ capital stock, or any
direct or indirect redemption, purchase, or other acquisition of any of such
stock by Princeton Acquisitions;
(k) any
alteration of Princeton Acquisitions’ method of accounting or the identity of
its auditors;
(l)
any issuance of equity securities to any officer, director or affiliate, except
pursuant to existing Princeton Acquisitions stock option plans;
(m) any
amendment to the Princeton Acquisitions Constituent Documents; or
(n) any
arrangement or commitment by Princeton Acquisitions to do any of the things
described in this Section 3.8.
3.9. Taxes.
(a) Since
July 1, 2003, and to the best knowledge of Princeton Acquisitions prior to July
1, 2003, Princeton Acquisitions has timely filed, or has caused to be timely
filed on its behalf, all Tax Returns required to be filed by it, and all such
Tax Returns are true, complete and accurate, except to the extent any failure to
file, any delinquency in filing or any inaccuracies in any filed Tax Returns,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Princeton Acquisitions Material Adverse
Effect. All Taxes shown to be due on such Tax Returns, or otherwise
owed, have been timely paid, except to the extent that any failure to pay,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Princeton Acquisitions Material Adverse Effect.
(b) The
most recent financial statements contained in the Princeton Acquisitions SEC
Documents reflect an adequate reserve for all Taxes payable by Princeton
Acquisitions (in addition to any reserve for deferred Taxes to reflect timing
differences between book and Tax items) for all Taxable periods and portions
thereof through the date of such financial statements. No deficiency
with respect to any Taxes has been proposed, asserted or assessed against
Princeton Acquisitions, and no requests for waivers of the time to assess any
such Taxes are pending, except to the extent any such deficiency or request for
waiver, individually or in the aggregate, has not had and would not reasonably
be expected to have a Princeton Acquisitions Material Adverse
Effect.
(c) There
are no Liens for Taxes (other than for current Taxes not yet due and payable) on
the assets of Princeton Acquisitions. Princeton Acquisitions is not
bound by any agreement with respect to Taxes.
11
3.10. Absence of Changes in
Benefit Plans. From
the date of the Princeton Acquisitions Financial Statements to the date of this
Agreement, there has not been any adoption or amendment in any material respect
by Princeton Acquisitions of any collective bargaining agreement or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, medical or other plan,
arrangement or understanding (whether or not legally binding) providing benefits
to any current or former employee, officer or director of Princeton Acquisitions
(collectively, “Princeton Acquisitions
Benefit Plans”). As of the date of this Agreement, there are
not any employment, consulting, indemnification, severance or termination
agreements or arrangements between Princeton Acquisitions and any current or
former employee, officer or director of Princeton Acquisitions, nor does
Princeton Acquisitions have any general severance plan or policy.
3.11.
ERISA
Compliance; Excess Parachute Payments. Princeton
Acquisitions does not, and since its inception never has, maintained or
contributed to any “employee pension benefit plans” (as defined in
Section 3(2) of ERISA), “employee welfare benefit plans” (as defined in
Section 3(1) of ERISA) or any other Princeton Acquisitions Benefit Plan for
the benefit of any current or former employees, consultants, officers or
directors of Princeton Acquisitions.
3.12. Litigation. There
is no Action against or affecting Princeton Acquisitions or any subsidiary or
any of their respective properties which (a) adversely affects or challenges the
legality, validity or enforceability of either of this Agreement or the Shares
or (b) could, if there were an unfavorable decision, individually or in the
aggregate, have or reasonably be expected to result in a Princeton Acquisitions
Material Adverse Effect. Neither Princeton Acquisitions nor any
subsidiary, nor any director or officer thereof (in his or her capacity as
such), is or has been the subject of any Action involving a claim or violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty.
3.13.
Real
Property. Neither
Princeton Acquisitions nor any of its subsidiaries owns any real
property. Neither Princeton Acquisitions nor any of its subsidiaries
has any leaseholds or other interests in any real property. Princeton
Acquisitions and each of its subsidiaries have good and valid title to those
leaseholds and other interests free and clear of all liens and encumbrances, and
the real property that those leasehold and other interests pertain constitutes
the only real property used in Princeton Acquisitions’ business.
3.14. Environmental
Matters. None
of the operations of Princeton Acquisitions or any of its subsidiaries involves
the generation, transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state, local or foreign
equivalent.
3.15. Compliance with Applicable
Laws. Princeton
Acquisitions is in compliance with all applicable Laws, including those relating
to occupational health and safety, the environment, export controls, trade
sanctions and embargoes, except for instances of noncompliance that,
individually and in the aggregate, have not had and would not reasonably be
expected to have a Princeton Acquisitions Material Adverse
Effect. Princeton Acquisitions has not received any written
communication during the past two years from a Governmental Entity that alleges
that Princeton Acquisitions is not in compliance in any material respect with
any applicable Law. Princeton Acquisitions is in compliance with all
effective requirements of the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the
rules and regulations thereunder, that are applicable to it, except where such
noncompliance could not have or reasonably be expected to result in a Princeton
Acquisitions Material Adverse Effect. This Section 3.15
does not relate to matters with respect to Taxes, which are the subject of Section 3.9.
12
3.16. Business
Activities. Princeton
Acquisitions has not conducted any business activities, either directly or
indirectly, within any country that is on the U.S. Department of State’s list of
state sponsors of terrorism.
3.17. Contracts. Except
as set disclosed in the Princeton Acquisitions SEC Documents, there are no
Contracts that are material to the business, properties, assets, condition
(financial or otherwise), results of operations or prospects of Princeton
Acquisitions taken as a whole. Princeton Acquisitions is not in
violation of or in default under (nor does there exist any condition which upon
the passage of time or the giving of notice would cause such a violation of or
default under) any Contract to which it is a party or by which it or any of its
properties or assets is bound, except for violations or defaults that would not,
individually or in the aggregate, reasonably be expected to result in a
Princeton Acquisitions Material Adverse Effect.
3.18. Title to
Properties. Princeton
Acquisitions has good title to, or valid leasehold interests in, all of its
properties and assets used in the conduct of its businesses. All such
assets and properties, other than assets and properties in which Princeton
Acquisitions has leasehold interests, are free and clear of all Liens, except
for Liens that, in the aggregate, do not and will not materially interfere with
the ability of Princeton Acquisitions to conduct business as currently
conducted. Princeton Acquisitions has complied in all material
respects with the terms of all material leases to which it is a party and under
which it is in occupancy, and all such leases are in full force and
effect. Princeton Acquisitions enjoys peaceful and undisturbed
possession under all such material leases.
3.19. Intellectual
Property. Princeton
Acquisitions owns, or is validly licensed or otherwise has the right to use, all
Intellectual Property Rights which are material to the conduct of the business
of Princeton Acquisitions taken as a whole. No claims are pending or,
to the knowledge of Princeton Acquisitions, threatened that Princeton
Acquisitions is infringing or otherwise adversely affecting the rights of any
person with regard to any Intellectual Property Right. To the
knowledge of Princeton Acquisitions, no person is infringing the rights of
Princeton Acquisitions with respect to any Intellectual Property
Right.
3.20. Labor
Matters. There
is no collective bargaining or other labor union agreements to which Princeton
Acquisitions is a party or by which it is bound. No material labor
dispute exists or, to the knowledge of Princeton Acquisitions, is imminent with
respect to any of the employees of Princeton Acquisitions.
3.21. Market
Makers. Princeton
Acquisitions has at least two (2) market makers for the Princeton Acquisitions
Common Stock and such market makers have obtained all permits and made all
filings necessary in order for such market makers to continue as market makers
of Princeton Acquisitions.
3.22. Transactions With Affiliates
and Employees. Except
as set forth in the Princeton Acquisitions SEC Documents, none of the officers
or directors of Princeton Acquisitions and, to the knowledge of Princeton
Acquisitions, none of the employees of Princeton Acquisitions is presently a
party to any transaction with Princeton Acquisitions or any subsidiary (other
than for services as employees, officers and directors), including any Contract
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of Princeton Acquisitions, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
13
3.23. Internal Accounting
Controls. Princeton
Acquisitions maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (a) transactions are executed in accordance
with management’s general or specific authorizations, (b) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (c) access to assets is permitted only in accordance with
management’s general or specific authorization, and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. Princeton Acquisitions has established disclosure
controls and procedures for Princeton Acquisitions and designed such disclosure
controls and procedures to ensure that material information relating to
Princeton Acquisitions is made known to the officers by others within those
entities. Princeton Acquisitions’ officers have evaluated the
effectiveness of Princeton Acquisitions’ controls and
procedures. Since March 31, 2009, there have been no significant
changes in Princeton Acquisitions’ internal controls or, to Princeton
Acquisitions’ knowledge, in other factors that could significantly affect
Princeton Acquisitions’ internal controls.
3.24. Application of Takeover
Protections. Princeton
Acquisitions has taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Princeton Acquisitions’ charter documents or
the laws of its state of incorporation that is or could become applicable to the
Shareholders as a result of the Shareholders and Princeton Acquisitions
fulfilling their obligations or exercising their rights under this Agreement,
including, without limitation, the issuance of the Shares and the Shareholders’
ownership of the Shares.
3.25. No Additional
Agreements. Princeton
Acquisitions does not have any agreement or understanding with the Shareholders
with respect to the Transactions other than as specified in this
Agreement.
3.26. Investment
Company. Princeton
Acquisitions is not, and is not an affiliate of, and immediately following the
Effective Time will not have become, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.
3.27. Disclosure. Princeton
Acquisitions confirms that neither it nor any person acting on its behalf has
provided the Shareholders or its agent or counsel with any information that
Princeton Acquisitions believes constitutes material, non-public information
except insofar as the existence and terms of the Transactions may constitute
such information and except for information that will be disclosed by Princeton
Acquisitions under a current report on Form 8-K filed within four business days
after the Closing. Princeton Acquisitions understands and confirms
that the Shareholders will rely on the foregoing representations and covenants
in effecting transactions in securities of Princeton
Acquisitions. All disclosure provided to the Shareholders regarding
Princeton Acquisitions, its business and the Transactions, furnished by or on
behalf of Princeton Acquisitions (including Princeton Acquisitions’
representations and warranties set forth in this Agreement) is true and correct
and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading.
3.28. Certain Registration
Matters. Princeton
Acquisitions has not granted or agreed to grant to any person any rights
(including “piggy-back” registration rights) to have any securities of Princeton
Acquisitions registered with the SEC or any other governmental authority that
have not been satisfied.
3.29. Listing and Maintenance
Requirements. Princeton
Acquisitions is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with the listing and
maintenance requirements for continued listing of the Princeton Acquisitions
Stock on the trading market on which the Princeton Acquisitions Stock is
currently listed or quoted. The issuance and sale of the Shares under
this Agreement does not contravene the rules and regulations of the trading
market on which the Princeton Acquisitions Stock is currently listed or quoted,
and no approval of the stockholders of Princeton Acquisitions is required for
Princeton Acquisitions to issue and deliver to the Shareholders the Shares
contemplated by this Agreement.
14
3.30. No Undisclosed Events,
Liabilities, Developments or Circumstances. No
event, liability, development or circumstance has occurred or exists, or is
contemplated to occur with respect to Princeton Acquisitions, its subsidiaries
or their respective businesses, properties, prospects, operations or financial
condition, that would be required to be disclosed by Princeton Acquisitions
under applicable securities laws on a registration statement on Form S-1 filed
with the SEC relating to an issuance and sale by Princeton Acquisitions of its
common stock and which has not been publicly announced.
3.31. Foreign Corrupt
Practices. Neither
Princeton Acquisitions, nor to Princeton Acquisitions’ knowledge, any director,
officer, agent, employee or other person acting on behalf of Princeton
Acquisitions has, in the course of its actions for, or on behalf of, Princeton
Acquisitions (a) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity; (b)
made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (c) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended; or (d) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
ARTICLE
IV
Deliveries
4.1.
Deliveries of the
Shareholders.
(a) Concurrently
herewith the Shareholders are delivering to Princeton Acquisitions this
Agreement executed by the Shareholders.
(b) At
or prior to the Closing, Xxxxxx Xxxxx and the Shareholders shall deliver to
Princeton Acquisitions certificate(s) representing the Shareholders Stock,
together with duly executed instruments of transfer for transfer by the
Shareholders of the Shareholders Stock to Princeton Acquisitions, in a form and
substance satisfactory to Princeton Acquisitions.
4.2.
Deliveries
of Princeton Acquisitions.
(a) Concurrently
herewith, Princeton Acquisitions is delivering to the Shareholders and to Xxxxxx
Xxxxx, a copy of this Agreement executed by Princeton Acquisitions.
(b) At
or prior to the Closing, Princeton Acquisitions shall deliver to Xxxxxx
Xxxxx:
(i)
a certificate from Princeton Acquisitions, signed by its
Secretary or Assistant Secretary, certifying that the attached copies of the
Princeton Acquisitions Charter, Princeton Acquisitions Bylaws and resolutions of
the Board of Directors of Princeton Acquisitions approving this Agreement and
the Transactions are all true, complete and correct and remain in full force and
effect;
(ii) a
certificate of status of Princeton Acquisitions dated within five (5) business
days of Closing issued by the Secretary of State of Colorado;
15
(iii) a
letter of resignation from each director and officer of Princeton Acquisitions
resigning from their positions effective as of the Effective Time; provided that
the resignation of Xxxxxxx Xxxxxx as director shall not become effective until
the tenth (10th) day
following the mailing by Princeton Acquisitions to its stockholders of the 14f-1
Notice;
(iv) evidence
of (A) the election of Xxxxxxx X. Xxxx as a director of Princeton Acquisitions
effective as of the Effective Time, (B) the election of Xxxxx Xxxxx and Xxxxxx
Xxxxxx as directors of Princeton Acquisitions effective on the later of (1) the
Closing and (2) the tenth (10th) day
following the mailing by Princeton Acquisitions to its stockholders of the 14f-1
Notice; and (C) the appointment of Xxxxxxx X. Xxxx as the Chief Executive
Officer and Xxxx X. Xxxxx as the Chief Financial Officer of Princeton
Acquisitions, and such other executive officers of Princeton Acquisitions as
designated by Xxxxxx Xxxxx, effective as of the Effective Time;
(v) such
pay-off letters and releases relating to liabilities of Princeton Acquisitions
as Xxxxxx Xxxxx shall request, in form and substance satisfactory to Xxxxxx
Xxxxx;
(vi) the
results of UCC, judgment lien and tax lien searches with respect to Princeton
Acquisitions, the results of which indicate no Liens on the assets of Princeton
Acquisitions; and
(vii) a
duly executed release by the current directors and officers of Princeton
Acquisitions and their affiliates in favor of Princeton
Acquisitions, Xxxxxx Xxxxx and the Shareholders, in form and substance
satisfactory to Xxxxxx Xxxxx.
(c) At
or prior to the Closing, Princeton Acquisitions shall deliver to Xxxxxx Xxxxx
and the Shareholders, an opinion from its counsel in form and substance
reasonably satisfactory to the Shareholders.
(d) At
or within five business days following the Closing, Princeton Acquisitions shall
deliver
(i)
to the Shareholders a certificate
representing the Shares issued to the Shareholders as set forth on Annex A.
(ii) to
Xxxxxx Xxxxx, consent letters of the accounting firms of Princeton Acquisitions
confirming each such firm’s respective consent to the use by Princeton
Acquisitions of reports prepared by such firm regarding the financial statements
of Princeton Acquisitions in all future registration statements filed with the
SEC.
4.3. Deliveries of Xxxxxx
Xxxxx.
(a) Concurrently
herewith, Xxxxxx Xxxxx is delivering to Princeton Acquisitions this Agreement
executed by Xxxxxx Xxxxx.
(b) At
or prior to the Closing, Xxxxxx Xxxxx shall deliver to Princeton Acquisitions a
certificate from Xxxxxx Xxxxx, signed by its authorized officer certifying that
the attached copies of the Xxxxxx Xxxxx Constituent Instruments and resolutions
of the Board of Directors of Xxxxxx Xxxxx approving this Agreement and the
Transactions are all true, complete and correct and remain in full force and
effect.
16
ARTICLE
V
Conditions to
Closing
5.1. Shareholders and Xxxxxx
Xxxxx Conditions Precedent. The
obligations of the Shareholders and Xxxxxx Xxxxx to enter into and complete the
Closing are subject, at the option of the Shareholders and Xxxxxx Xxxxx, to the
fulfillment on or prior to the Closing Date of the following
conditions:
(a) Representations and
Covenants. The representations and warranties of Princeton
Acquisitions contained in this Agreement shall be true in all material respects
on and as of the Closing Date with the same force and effect as though made on
and as of the Closing Date. Princeton Acquisitions shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by
Princeton Acquisitions on or prior to the Closing Date. Princeton
Acquisitions shall have delivered to the Shareholders and Xxxxxx Xxxxx a
certificate, dated the Closing Date, to the foregoing effect.
(b) Litigation. No
action, suit or proceeding shall have been instituted before any court or
governmental or regulatory body or instituted or threatened by any governmental
or regulatory body to restrain, modify or prevent the carrying out of the
Transactions or to seek damages or a discovery order in connection with such
Transactions, or which has or may have, in the reasonable opinion of Xxxxxx
Xxxxx or the Shareholders, a materially adverse effect on the assets,
properties, business, operations or condition (financial or otherwise) of
Princeton Acquisitions or Xxxxxx Xxxxx.
(c) No Material Adverse
Change. There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since June 30, 2007 which has
had or is reasonably likely to cause a Princeton Acquisitions Material Adverse
Effect.
(d) SEC
Reports. Princeton Acquisitions shall have filed all reports
and other documents required to be filed by Princeton Acquisitions under the
U.S. federal securities laws through the Closing Date.
(e) OTCBB
Quotation. Princeton Acquisitions shall have maintained its
status as a company whose common stock is quoted on the Over-the-Counter
Bulletin Board and no reason shall exist as of the Closing Date as to why such
status shall not continue immediately following the Effective Time.
(f)
Deliveries. The
deliveries specified in Section 4.2
shall have been made by Princeton Acquisitions.
(g) No Suspensions of Trading in
Princeton Acquisitions Stock; Listing. Trading in the
Princeton Acquisitions Stock shall not have been suspended by the SEC or any
trading market (except for any suspensions of trading of not more than one
trading day solely to permit dissemination of material information regarding
Princeton Acquisitions) at any time since the date of execution of this
Agreement, and the Princeton Acquisitions Stock shall have been at all times
since such date listed for trading on a trading market.
17
(h) Satisfactory Completion of
Due Diligence. Xxxxxx Xxxxx and the Shareholders shall have
completed their legal, accounting and business due diligence of Princeton
Acquisitions and the results thereof shall be satisfactory to Xxxxxx Xxxxx and
the Shareholders in their sole and absolute discretion.
(i)
Delivery of Audit Report and
Financial Statements. Xxxxxx Xxxxx shall have completed the
Xxxxxx Xxxxx Financial Statements and shall have received an audit report from
an independent audit firm that is registered with the Public Company Accounting
Oversight Board relating to the fiscal years ended December 31, 2008 and
unaudited financial statements for the quarter ended June 30, 2009. The form and substance
of the Financial Statements shall be satisfactory to Princeton Acquisitions in
its sole and absolute discretion.
(j)
Delivery of Legal Opinion by
Counsel to Princeton Acquisitions. Xxxxxx Xxxxx and the
Shareholders shall have received an opinion from counsel to Princeton
Acquisitions in the form and substance reasonably satisfactory to the
Shareholders.
(k)
Delivery of Legal Opinion by
Counsel to Xxxxxx Xxxxx. Princeton Acquisitions shall have
received an opinion of counsel to Xxxxxx Xxxxx in form and substance
satisfactory to the Princeton Acquisitions.
(l)
Stock Purchase
Agreement. Certain of the stockholders of Princeton
Acquisitions (the “Sellers”) holding an
aggregate of 1,542,695 shares of Princeton Acquisitions Stock (the “Sellers’ Shares”)
representing approximately 90% of the issued and outstanding shares of Princeton
Acquisitions Stock (before giving effect to the transactions contemplated by
this Agreement and the Financing) shall have entered into a stock purchase
agreement (the “Purchase Agreement”)
to sell 1,383,543 of the Sellers’ Shares for $250,000 (the “Stock Purchase
Price”) to certain of the shareholders of Xxxxxx Xxxxx (the “Purchasers”).
(m) Shareholder
Approval. Xxxxxx Xxxxx shall have received any shareholder
approval by the shareholders of Xxxxxx Xxxxx whose consent or approval is
required pursuant to the terms of the Xxxxxx Xxxxx Constituent Documents and
applicable law.
(n) Consents and
Approvals. Xxxxxx Xxxxx shall have obtained all consents and
approvals necessary to consummate the transactions contemplated by this
Agreement (the “Xxxxxx
Xxxxx Consents”), in order that the transactions contemplated herein not
constitute a breach or violation of, or result in a right of termination or
acceleration of, or creation of any encumbrance on any of Xxxxxx Xxxxx’ assets
pursuant to the provisions of, any agreement, arrangement or undertaking of or
affecting Xxxxxx Xxxxx or any license, franchise or permit of or affecting
Xxxxxx Xxxxx.
(o) Completion of Initial
Financing. The Initial Financing in an amount of at least
$250,000 shall have been completed or shall be completed simultaneously with the
Closing.
5.2. Princeton Acquisitions
Conditions Precedent. The
obligations of Princeton Acquisitions to enter into and complete the Closing is
subject, at the option of Princeton Acquisitions, to the fulfillment on or prior
to the Closing Date of the following conditions, any one or more of which may be
waived by Princeton Acquisitions in writing:
(a) Representations and
Covenants. The representations and warranties of Xxxxxx Xxxxx
contained in this Agreement shall be true in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing Date. Xxxxxx Xxxxx shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by Xxxxxx Xxxxx on or prior to the Closing
Date. Xxxxxx Xxxxx shall have delivered to Princeton Acquisitions a
certificate, dated the Closing Date, to the foregoing effect.
18
(b) Litigation. No
action, suit or proceeding shall have been instituted before any court or
governmental or regulatory body or instituted or threatened by any governmental
or regulatory body to restrain, modify or prevent the carrying out of the
Transactions or to seek damages or a discovery order in connection with such
Transactions, or which has or may have, in the reasonable opinion of Princeton
Acquisitions, a materially adverse effect on the assets, properties, business,
operations or condition (financial or otherwise) of Xxxxxx Xxxxx
(c) No Material Adverse
Change. There shall not have been any occurrence, event,
incident, action, failure to act, or transaction since December 31, 2008 which
has had or is reasonably likely to cause an Xxxxxx Xxxxx Material Adverse
Effect.
(d) Audited Financial Statements
and Form 10 Disclosure. Xxxxxx Xxxxx shall have provided
Princeton Acquisitions and the Shareholders with reasonable assurances that
Princeton Acquisitions will be able to comply with its obligation to file a
current report on Form 8-K no later than four (4) business days following the
Closing containing the requisite audited consolidated financial statements of
Xxxxxx Xxxxx and the requisite Form 10-type disclosure regarding Xxxxxx
Xxxxx.
(e) Deliveries. The
deliveries specified in Section 4.1 and
Section 4.3
shall have been made by the Shareholders and Xxxxxx Xxxxx,
respectively.
(f) Satisfactory Completion of
Due Diligence. Princeton Acquisitions shall have completed its
legal, accounting and business due diligence of Xxxxxx Xxxxx and the results
thereof shall be satisfactory to Princeton Acquisitions in its sole and absolute
discretion.
(g) Delivery of Audit Report and
Financial Statements. Xxxxxx Xxxxx shall have completed the
Xxxxxx Xxxxx Financial Statements and shall have received an audit report from
an independent audit firm that is registered with the Public Company Accounting
Oversight Board relating to the fiscal years ended December 31, 2008 and 2007
and unaudited financial statements for the quarter ended June 30, 2009. The form and
substance of the Financial Statements shall be satisfactory to Princeton
Acquisitions in its sole and absolute discretion.
(h) Stock Purchase
Agreement. The Sellers and Purchasers shall have entered into
the Purchase Agreement.
(i) Delivery of Legal Opinion of
Counsel to Xxxxxx Xxxxx. Princeton Acquisitions shall have
received an opinion of counsel to Xxxxxx Xxxxx in form and substance
satisfactory to Princeton Acquisitions.
ARTICLE
VI
Covenants and Other
Agreements
6.1. Preparation of the 14f-1
Notice; Blue Sky Laws.
(a) As
soon as possible, and in any event, within two business days following Closing,
the Xxxxxx Xxxxx and Princeton Acquisitions shall prepare and file with the SEC
the 14f-1 Notice in connection with the consummation of this
Agreement. Princeton Acquisitions shall cause the 14f-1 Notice to be
mailed to the Princeton Acquisitions’ Shareholders as promptly as practicable
thereafter.
19
(b) Princeton
Acquisitions shall take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified) required to be taken under any
applicable state securities laws in connection with the issuance of the Shares
in connection with this Agreement.
6.2.
Public
Announcements. Princeton
Acquisitions and Xxxxxx Xxxxx will consult with each other before issuing, and
provide each other the opportunity to review and comment upon, any press
releases or other public statements with respect to this Agreement and the
Transactions and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
Law, court process or by obligations pursuant to any listing agreement with any
national securities exchanges.
6.3. Fees and
Expenses. All
fees and expenses incurred in connection with this Agreement shall be paid by
the Party incurring such fees or expenses, whether or not this Agreement is
consummated.
6.4. Continued
Efforts. Each
Party shall use commercially reasonable efforts to (a) take all action
reasonably necessary to consummate the Transactions, and (b) take such
steps and do such acts as may be necessary to keep all of its representations
and warranties true and correct as of the Closing Date with the same effect as
if the same had been made, and this Agreement had been dated, as of the Closing
Date.
6.5. Exclusivity. Neither
Princeton Acquisitions nor its shareholders shall, directly or indirectly (a)
solicit, initiate, or encourage the submission of any proposal or offer from any
person relating to the acquisition of any capital stock or other voting
securities of Princeton Acquisitions, or any assets of Princeton Acquisitions
(including any acquisition structured as a merger, consolidation, share exchange
or other business combination), (b) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
person to do or seek any of the foregoing, or (c) take any other action that is
inconsistent with the Transactions and that has the effect of avoiding the
Closing contemplated hereby. Princeton Acquisitions shall notify
Xxxxxx Xxxxx immediately if any person makes any proposal, offer, inquiry, or
contact with respect to any of the foregoing.
6.6. Filing of 8-K and Press
Release. Princeton
Acquisitions shall file, no later than four (4) business days after the Closing
Date, a current report on Form 8-K and attach as exhibits all relevant
agreements with the SEC disclosing the terms of this Agreement and other
requisite disclosure regarding the Transactions and including the requisite
audited consolidated financial statements of Xxxxxx Xxxxx and the requisite Form
10 disclosure regarding Xxxxxx Xxxxx. In addition, Princeton
Acquisitions shall issue a press release prior to 9:30 a.m. (New York Time) on
the business day following the Closing Date, announcing the
Closing.
6.7. Preservation of
Business. From
the date of this Agreement until the Effective Date, each of Xxxxxx Xxxxx and
Princeton Acquisitions shall operate only in the ordinary and usual course of
business consistent with its past practices (provided, however, that Princeton
Acquisitions shall not issue any securities without the prior written consent of
Xxxxxx Xxxxx), and shall use reasonable commercial efforts to (a) preserve
intact its business organization, (b) preserve the good will and advantageous
relationships with customers, suppliers, independent contractors, employees and
other Persons material to the operation of its business, and (c) not permit any
action or omission that would cause any of its representations or warranties
contained herein to become inaccurate or any of its covenants to be breached in
any material respect.
20
6.8. Due Diligence; Access to
Information; Confidentiality.
(a) Between
the date hereof and the Effective Date, Xxxxxx Xxxxx and Princeton Acquisitions
shall afford to the other party and their authorized representatives the
opportunity to conduct and complete a due-diligence investigation of the other
party as described herein. Each party shall permit the other party
full access on reasonable notice and at reasonable hours to its properties and
shall disclose and make available (together with the right to copy) to the other
party and its officers, employees, attorneys, accountants and other
representatives, all books, papers and records relating to the assets, stock,
properties, operations, obligations and liabilities of such party and its
subsidiaries, including without limitation all books of account (including
without limitation the general ledger), tax records, minute books of directors’
and stockholders’ meetings, organizational documents, bylaws, contracts and
agreements, filings with any regulatory authority, accountants’ work papers,
litigation files (including, without limitation, legal research memoranda),
attorney’s audit response letters, documents relating to assets and title
thereto (including without limitation abstracts, title insurance policies,
surveys, environmental reports, opinions of title and other information relating
to the real and personal property), plans affecting employees,
securities-transfer records and stockholder lists, and any books, papers and
records relating to other assets or business activities in which such party may
have a reasonable interest, and otherwise provide such assistance as is
reasonably requested in order that each party may have a full opportunity to
make such investigation and evaluation as it shall reasonably desire to make of
the business and affairs of the other party; provided, however, that the
foregoing rights granted to each party shall, whether or not and regardless of
the extent to which the same are exercised, in no way affect the nature or scope
of the representations, warranties and covenants of the respective party set
forth herein. In addition, each party and its officers and directors shall
cooperate fully (including providing introductions, where necessary) with such
other party to enable the party to contact third parties, including customers,
prospective customers, specified agencies or others as the party deems
reasonably necessary to complete its due diligence; provided further, that such
party agrees not to initiate such contacts without the prior approval of the
other party, which approval will not be unreasonably withheld.
(b) Prior
to Effective Time and if, for any reason, the transactions contemplated by this
Agreement are not consummated, neither Princeton Acquisitions nor Xxxxxx Xxxxx
nor any of their officers, employees, attorneys, accountants and other
representatives shall disclose to third parties or otherwise use any
confidential information received from the other party in the course of
investigating, negotiating, and performing the transactions contemplated by this
Agreement; provided, however, that nothing shall be deemed to be confidential
information which:
(i) is
known to the party receiving the information at the time of disclosure, unless
any individual who knows the information is under an obligation to keep that
information confidential;
(ii) becomes
publicly known or available without the disclosure thereof by the party
receiving the information in violation of this Agreement; or
(iii) is
received by the party receiving the information from a third party not under an
obligation to keep that information confidential.
21
This
provision shall not prohibit the disclosure of information required to be made
under federal or state securities laws, rules and regulations or by order of any
federal, state or local regulatory agency or as otherwise required to be
disclosed under applicable law. If any disclosure is so required, the
party making such disclosure shall consult with the other party prior to making
such disclosure, and the parties shall use all reasonable efforts, acting in
good faith, to agree upon a text for such disclosure that is satisfactory to
both parties.
6.9. Covenant of Further
Assurance. The
Parties covenant and agree that they shall, from time to time, execute and
deliver or cause to be executed and delivered all such further instruments of
conveyance, transfer, assignments, receipts and other instruments, and shall
take or cause to be taken such further or other actions as the other party or
parties to this Agreement may reasonably deem necessary in order to carry out
the purposes and intent of this Agreement.
6.10. Financing. Princeton
Acquisitions acknowledges and agrees that: (i) Xxxxxx Xxxxx is contemplating the
completion of the Initial Financing; (ii) Xxxxxx Xxxxx may complete an
additional equity financing transaction after the Effective Time on terms that
are not yet determined and that will be satisfactory to Xxxxxx Xxxxx, in its
sole discretion (collectively with the Initial Financing, the “Financings”), which
Financings may be consummated prior to, concurrently with or following the
Closing; and (iii) that, after reflecting the Financings, the Shareholders
(including investors in the Financings) may hold approximately 99% of the
capital stock of Princeton Acquisitions, on a fully diluted basis, as of and
immediately after the Effective Time, and consequently, the existing
shareholders of Princeton Acquisitions (as of prior to the Effective Time) may
collectively hold approximately 1% of the outstanding capital stock, on a fully
diluted basis, of Princeton Acquisitions as of and immediately after the
Effective Time and/or the Financings. The amounts set forth herein
are estimates, and nothing herein shall be interpreted to prevent Xxxxxx Xxxxx
from completing additional financings after the Effective Time.
6.11. Deposit. On
or around July 20, 2009, Xxxxxx Xxxxx made a cash deposit of $25,000 (the
“Initial Deposit”) into a trust account for the benefit of Princeton
Acquisitions held by the Law Office of Xxxx Xxxxx (the “Deposit Account”), the
receipt of which is hereby acknowledged by Princeton Acquisitions. On
the date of execution of this Agreement, Xxxxxx Xxxxx has made an additional
cash deposit of $15,000 (collectively with the Initial Deposit, the “Deposit”)
into the Deposit Account. Upon closing of the Purchase Agreement, the
Deposit shall be fully credited against the Stock Purchase Price for the
Sellers’ Shares to be purchased as a condition to Closing (as such terms are
referenced in Section 5.1(l)). In the event Princeton Acquisitions
complies with the terms of this Agreement and the shareholders of Princeton
comply with the terms of the Purchase Agreement and this Agreement does not
close on or before September 25, 2009 for any reason other than a breach of such
agreements or mutual termination by the Parties, the Deposit shall be
non-refundable and shall be released from the Deposit Account to Princeton
Acquisitions.
ARTICLE
VII
Termination
7.1. Termination. This
Agreement may be terminated prior to the Closing:
(a) by
mutual consent of Xxxxxx Xxxxx and Princeton Acquisitions, if the board of
directors of each so determines by vote of a majority of the members of its
entire board;
22
(b) by
Princeton Acquisitions, if Xxxxxx Xxxxx shall have breached any of its
representations or failed to perform any of its covenants herein, which breach
or failure to perform (i) causes the condition set forth in Section 5.1(a) not to
be satisfied, and (ii) is incapable of being cured or has not been cured within
10 business days after the giving of written notice of such breach or failure to
perform; provided,
however, that Princeton Acquisitions may only terminate this Agreement
pursuant to this Section 7.1(b) if the
subject breach or failure to perform would be reasonably likely to have a Xxxxxx
Xxxxx Material Adverse Effect and on the surviving company taken as a
whole;
(c) by
Xxxxxx Xxxxx, if Princeton Acquisitions shall have breached any of its
representations or failed to perform any of its covenants herein, which breach
or failure to perform (i) causes the condition set forth in Section 5.2(a) not to
be satisfied, and (ii) is incapable of being cured or has not been cured within
10 business days after the giving of written notice of such breach or failure to
perform; provided,
however, that Xxxxxx Xxxxx may only terminate this Agreement pursuant
this Section
7.1(c) if the subject breach or failure to perform would be reasonably
likely to have a Princeton Acquisitions Material Adverse Effect and on the
surviving company taken as a whole;
(d) by
Xxxxxx Xxxxx if it is not satisfied, in its sole discretion, with the due
diligence completed on Princeton Acquisitions; or
(e) by
either Xxxxxx Xxxxx or Princeton Acquisitions if the Closing has not occurred on
or before September 25, 2009, or such later date as Xxxxxx Xxxxx and Princeton
Acquisitions may mutually agree (unless the failure to consummate the Share
Exchange by such date shall be due to the action or failure to act of the party
seeking to terminate this Agreement in breach of such party’s obligations under
this Agreement).
Any party
desiring to terminate this Agreement shall give prior written notice of such
termination and the reasons therefor to the other parties.
ARTICLE
VIII
Exchange of
Shares
8.1. Exchange of
Shares. At
the Closing, Princeton Acquisitions shall issue a letter to the transfer agent
of Princeton Acquisitions with a copy of the resolution of the Board of
Directors of Princeton Acquisitions authorizing and directing the issuance of
the Shares as set forth on Annex A.
8.2. Non-Registration;
Legend The
Shares have not been registered under the Securities Act of 1933, as amended
(the “Securities
Act”) and will be issued by reason of a specific exemption from the
registration provisions of the Securities Act. The Shares shall be
“restricted securities” under the Securities Act and may not be transferable
without registration under the Securities Act or the existence of an exemption
therefrom. The Shares will bear the following legend or one that is
substantially similar to the following legend:
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
23
Additionally,
the Shares will bear any legend required by the “blue sky” laws of any state to
the extent such laws are applicable to the securities represented by the
certificate so legended.
ARTICLE
IX
Miscellaneous
9.1. Notices. All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing and shall be deemed given upon receipt by the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice):
If to
Princeton Acquisitions, to:
Attn: Xxxxxxx
Xxxxxx
Princeton
Acquisitions, Inc.
0000 Xxxx
Xxxx Xxxxxx, Xxx 000
Xxxxxxxxx,
Xxxxxxxx 00000
Tel: (000)
000-0000
Fax: (000)
000-0000
with a
copy to:
Law
Office of Xxxx Xxxxx
0000 XXX
Xxxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000)
000-0000
If to
Xxxxxx Xxxxx, to:
Xxxxxx
Xxxxx Mining Corporation
00 Xxxxx
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx,
XX 00000
Attention: Xxxxxxx
X. Xxxx
Fax: (000)
000-0000
with a
copy to:
Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
3300
Xxxxx Fargo Center
00 Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxxxxxx,
XX 00000-0000
Attention: Xxxxx
Xxxxxxx
Fax: (000)
000-0000
If to the
Shareholders at the addresses set forth in Annex A
hereto.
24
9.2. Amendments; Waivers; No
Additional Consideration. No
provision of this Agreement may be waived or amended except in a written
instrument signed by Xxxxxx Xxxxx, Princeton Acquisitions and the
Shareholders. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any Party to exercise any right hereunder in any manner impair the
exercise of any such right. No consideration shall be offered or paid
to the Shareholders to amend or consent to a waiver or modification of any
provision of any Transaction Document unless the same consideration is also
offered to all shareholders who then hold any of the Shares.
9.3. Replacement of
Securities. If
any certificate or instrument evidencing any Shares is mutilated, lost, stolen
or destroyed, Princeton Acquisitions shall issue or cause to be issued in
exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to Princeton Acquisitions of such loss, theft
or destruction and customary and reasonable indemnity, if
requested. The applicants for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs associated
with the issuance of such replacement Shares. If a replacement
certificate or instrument evidencing any Shares is requested due to a mutilation
thereof, Princeton Acquisitions may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.
9.4. Remedies. In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, the Shareholders, Princeton Acquisitions and
Xxxxxx Xxxxx will be entitled to specific performance under this
Agreement. The Parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
9.5. Limitation of
Liability. Notwithstanding
anything herein to the contrary, each of Princeton Acquisitions and Xxxxxx Xxxxx
acknowledges and agrees that the liability of the Shareholders arising directly
or indirectly, under any Transaction Document of any and every nature whatsoever
shall be satisfied solely out of the assets of the Shareholders, and that no
trustee, officer, other investment vehicle or any other affiliate of the
Shareholders or any investor, shareholder or holder of shares of beneficial
interest of the Shareholders shall be personally liable for any liabilities of
the Shareholders.
9.6. Interpretation. When
a reference is made in this Agreement to a Section, such reference shall be to a
Section of this Agreement unless otherwise indicated. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation.”
9.7. Severability. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule or Law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the Transactions is not affected
in any manner materially adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that the Transactions are fulfilled
to the extent possible.
9.8. Counterparts; Facsimile
Execution. This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the Parties and delivered to the
other Parties. Facsimile execution and delivery of this Agreement is
legal, valid and binding for all purposes.
25
9.9. Entire Agreement; Third
Party Beneficiaries. This
Agreement, taken together with the Xxxxxx Xxxxx Disclosure Letter and the
schedules and exhibits hereto, including without limitation the Stock Purchase
Agreement, (a) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the Parties with
respect to the Transactions and (b) are not intended to confer upon any person
other than the Parties any rights or remedies.
9.10. Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Minnesota, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof, except to the extent the
laws of Colorado are mandatorily applicable to the Transactions.
9.11. Assignment. Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise by any of the Parties without the prior written consent of each of the
other Parties. Any purported assignment without such consent shall be
void. Subject to the preceding sentences, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the Parties and
their respective successors and assigns.
[Signature Page
Follows]
26
IN
WITNESS WHEREOF, the parties hereto have caused this Share Exchange Agreement to
be duly executed by their respective authorized signatories as of the date first
indicated above.
PRINCETON
ACQUISITIONS, INC.
|
|
By:
|
/s/
Xxxxxxx Xxxxxx
|
Name:
|
Xxxxxxx Xxx Xxxxxx
|
Title:
|
President
|
XXXXXX
XXXXX MINING CORPORATION
|
|
By:
|
/s/ Xxxxxxx X. Xxxx
|
Name:
|
Xxxxxxx X. Xxxx
|
Title:
|
C.E.O.
|
SHAREHOLDER:
|
|
WITS
BASIN PRECIOUS MINERALS INC.
|
|
By:
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/s/ Xxxxxxx X. Xxxx
|
Name:
|
Xxxxxxx X. Xxxx
|
Title:
|
C.E.O.
|