Minutes of
the Special Meeting of the
Board of Directors of Princeton Capital, Inc.
The special meeting of the Board of Directors of the corporation was held
at 150 River Rd., Ste. B-3, Montville, NJ on June 10, 1995. The following
persons were in attendance.
Louis Perosi, Jr.
Louis A. Perosi
The board reviewed a Stock and Cash Exchange Agreement between Princeton
Capital and Imagine America, which is presently operating under the name Charter
Financial Network, N.J. ("IMGI/Charter"), and which controls the SMALL$TOCK(R)
financial technology, trademarks, operations, current business contracts and
other assets. The Board reviewed the circumstances which brought about the Stock
and Cash Exchange Agreement and concluded that the transaction between
IMGI/Charter and Princeton is necessary for the business continuation of
Princeton and the consideration to be paid by Princeton to IMGI/Charter is fair
and reasonable. IMGI, operating as Charter, and Princeton Capital, Inc. have
reached an agreement under which all of the assets of IMGI/Charter will be
exchanged for 2,535,987 shares of the capital stock of Princeton and $40,000 in
cash consideration. The agreement calls for Charter to transfer ownership of all
its assets to Princeton. The Princeton Shares received by IMGI/Charter will be
distributed pro-rata to the IMGI/Charter shareholders as quickly as is
reasonably possible assuming things are completed in a planned business-like
fashion.
It is the intention of the Board of Directors to seek a method by which
IMGI/Charter realizes an increased valuation and subsequently pass this
valuation on to its shareholders. Since IMGI/Charter is a publicly owned
company, the Board believes there is value to its corporate Charter and the
management of IMGI/Charter feels a responsibility to the shareholders to extract
whatever value there may be and distribute that value to the shareholders. Such
value realization and distribution is expected to be completed within two years.
The purpose of this reorganization is to allow Princeton to continue the
business previously conducted by Charter, making use of the assets of Charter,
and continuing the proprietary interests. The exchange of shares contemplated by
this reorganization will result in ownership by IMGI/Charter shareholders,
immediately after this transaction, of more than 56% of the outstanding shares
of Princeton.
In addition, Princeton Capital has presented a business plan which
provides to IMGI a comfort level whereby Princeton shall endeavor to continue
and expand the operations initiated by IMGI/Charter.
In other matters, the Board approved a plan of reorganization presented by
Louis Perosi, Jr. for IMGI.
RESOLVED, that the Company approve and accept the Stock and Cash Exchange.
There being no further business before this meeting, it was adjourned.
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Chairman of Board Director
Louis Perosi, Jr. Louis A. Perosi
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STOCK AND CASH EXCHANGE AGREEMENT
This Stock Exchange Agreement ("Agreement") is made and entered into this tenth
day of June 1995 by and between Princeton Capital, Inc., a New Jersey
corporation (herein referred to as "Princeton"), and Charter Financial Network,
Inc., a New Jersey corporation (herein referred to as "Charter"), in accordance
with the terms and conditions herein.
ARTICLE I
EXCHANGE OF STOCK AND CASH
1.01 Exchange of Stock. Subject to terms and conditions set forth herein, and
the Asset Purchase contemplated by the parties hereto, Princeton does hereby
assign, transfer and otherwise convey to Charter two million five hundred thirty
five thousand nine hundred eighty seven (2,535,987) shares of common stock, no
par value, of Princeton ("Princeton Stock") and $40,000 in cash.
1.02 Additional Undertakings. Concurrent with the execution hereof the parties
hereto shall execute such additional instruments and take such additional action
as such party(ies) may reasonably request in order to effectuate the purpose and
intent of this Agreement. As an additional undertaking and inducement to
Princeton to enter into this Agreement, Charter acknowledges and agrees to
exchange all assets, equipment, trademarks and intellectual property, as shown
in the audited financial statements dated June 30, 1994, and the unaudited
financial statements dated June 1, 1995.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF CHARTER
As of the date hereof and at Closing, Charter does hereby represent and warrant
to Princeton as follows:
(i) Charter is a corporation duly organized, validly existing and is in good
standing under the laws of the State of New Jersey and in other jurisdictions
where it conducts business, has full corporate power and authority to execute
and deliver this Agreement and has no subsidiaries,
(ii) the authorized capital stock of Charter consists of 15,000,000 shares of
common stock, no par value,
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(iii) the issued and outstanding shares of capital stock of Charter consists of
5,071,974 shares of common stock. In addition, (a) there are no warrants,
rights, options, conversion privileges, stock purchase plans or other agreements
or undertakings, except as may be required to settled outstanding accounts with
creditors and noteholders, which obligates Charter now or upon the occurrence of
some future event to issue additional shares of capital stock and in the event
said undertaking, exist, may be remedied by Article I, paragraph 1.02 of this
Agreement, (b) there are no restrictions on the transfer of shares of capital
stock other than those imposed by relevant state and federal securities laws,
and (c) no holder of any security of Charter is entitled to any preemptive or
similar statutory or contractual rights, either arising pursuant to an agreement
or instrument to which Charter is a party or which are otherwise binding on
Charter. The Charter Shares are free and clear of any mortgage lien, pledge, or
other encumbrance and are duly authorized, validly issued, fully paid and
non-assessable shares of capital stock of Charter,
(iv) the financial statements of Charter set forth herein, which consist of an
unaudited balance sheet as of June 1, 1995 and related statements of income for
the periods then ended, are correct and fairly present the financial condition
of Charter for the periods involved, and such statements were prepared in
accordance with generally accepted accounting standards consistently applied;
(v) except as reflected or reserved against the balance sheet of Charter, as set
forth on herein, Charter has no liabilities of any nature, whether accrued,
absolute, contingent, or otherwise, including, without limitation, tax
liabilities and interest due or to become due except as disclosed in the
financial statements and work sheets of Charter. Charter's accounts receivable
are collectable in accordance with the terms of such accounts, except to the
extent of the reserve therefore in Charter's balance sheet set forth herein,
(vi) since the date of the financial statements set forth herein to the present,
there have not been any changes in the condition (financial or otherwise),
assets, liabilities, capitalization, business or business prospects of Charter
which, individually or in the aggregate, have been materially adverse,
(vii) the assets reflect on the balance sheet of Charter as of June 30, 1994 and
1995, are owned free and clear of all liens, claims, charges and encumbrances of
any kind or nature, except to the extent disposed of in the ordinary course of
business since June 30, 1994 and June 1, 1995, or as otherwise disclosed herein;
all such assets, if any, characterized as inventory are stated at no more than
the lower cost or market value and are, in all material respects, useable and
salable in the ordinary course of business,
(viii) at the written request of Princeton Board, Charter shall present a true
and correct list of any and all agreements, leases, arrangements or
understandings, written or oral, which Charter is a party, or by which any of
its assets or properties are legally bound,
(ix) there are no judicial or administrative actions, suits or proceedings,
pending or threatened, that might result in a material adverse change in the
condition (financial or
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otherwise), properties, assets, business or operations of Charter or that
question the validity of this agreement,
(x) neither the execution and delivery of this Agreement by Charter, nor the
consummation of the transactions set forth herein or contemplated hereby will
conflict with or result in any violence of or constitute a breach of or a
default under the Certificate of Incorporation or By Laws of Charter or under
any contract, instrument, agreement, understanding, mortgage, indenture, lease,
insurance policy, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to or
which Charter is a party or by which any of them are bound, nor will it give
rise to any right of acceleration in the time for performance or any obligation
of Charter under any contract or instrument, nor will it result in the creation
of any lien, charge, encumbrance of any asset of Charter,
(xi) Charter has filed or is in the process of filing all federal, state, local
and foreign tax returns which are due or has obtained appropriate extensions
with respect thereto and all such returns are true and correct in all material
respects as filed,
(xii) Charter is acquiring the Princeton Shares for distribution to its
stockholders. Charter represents that the Princeton Shares are being acquired in
a transaction which is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), and that it understands that the
Princeton Shares must be held indefinitely unless subsequently registered under
the Act or unless an exemption from registration is available, including Rule
144 under the Act, and that it must, accordingly, bear the economic risk of its
investment for an indefinite period of time, and
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PRINCETON
As of the date hereof and at Closing, Princeton does hereby represent and
warrant to Charter as follows:
(i) Princeton is a corporation duly organized, validly existing and is good
standing under the laws of the State of New Jersey and in other jurisdictions
where it conducts business, has full corporate power and authority to execute
and deliver this Agreement and has no subsidiaries.
(ii) the authorized capital stock of Princeton consists of 7,000,000 shares of
common stock, no par value,
(iii) the issued and outstanding shares of capital stock of Princeton consists
of 1,500,000 shares of common stock presently issued only to Mr. Perosi, Jr. In
addition,
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(a) there are no warrants, rights, options, conversion privileges, stock
purchase plans or other agreements or undertakings which obligates Princeton now
or upon the occurrence of some future event to issue additional shares of
capital stock, (b) there are no restrictions on the transfer of shares of
capital stock other than those imposed by relevant state and federal securities
laws, and (c) no holder of any security of Princeton is entitled to any
preemptive or similar statutory or contractual rights, either arising pursuant
to an agreement or instrument to which Princeton is a party or which are
otherwise binding on Princeton. The Princeton Shares are free and clear of any
mortgage lien, pledge, or other encumbrance and are duly authorized, validly
issued, fully paid and non-assessable shares of capital stock of Princeton,
(iv) the financial statements of Princeton which consist of an unaudited balance
sheet as of June 1, 1995 and related statements of income for the periods of
then ended, are correct and fairly present the financial condition of Princeton
for the periods involved, and such statements were prepared in accordance with
generally accepted accounting standards consistently applied;
(v) except as reflected or reserved against the balance sheet of Princeton, as
set forth herein, Charter has no liabilities of any nature, whether accrued,
absolute, contingent, or otherwise, including, without limitation, tax
liabilities and interest due or to become due. Princeton's accounts receivable
are collectable in accordance with the terms of such accounts, except to the
extent of the reserve therefore in Princeton's balance sheet,
(vi) since the date of Princeton's financial statements to the present, there
have not been any changes in the condition (financial or otherwise), assets,
liabilities, capitalization, business or business prospects of Princeton which,
individually or in the aggregate, have been materially adverse,
(vii) the assets reflect on the balance sheet of Princeton as of June 1, 1995,
are owned free and clear of all liens, claims, charges and encumbrances of any
kind or nature, except to the extent disposed of in the ordinary course of
business since June 1, 1995 or as otherwise disclosed on Exhibit 4; all such
assets, if any, characterized as inventory are stated at no more than the lower
of cost or market value and are, in all material respects, useable and salable
in the ordinary course of business,
(viii) there are no material contracts, agreements, leases, arrangements or
understandings, written or oral, which Princeton is a party to, or by which any
of its assets or properties are legally bound,
(ix) there are no judicial or administrative actions, suits or proceedings,
pending or threatened, that might result in a material adverse change in the
condition (financial or otherwise), properties, assets, business or operations
of Princeton or that question the validity of this agreement,
(x) neither the execution and delivery of this Agreement by Princeton, nor the
consummation of the transactions set forth herein or contemplated hereby will
conflict
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with or result in any violence of or constitute a breach of or a default under
the Certificate of Incorporation or By Laws of Princeton or under any contract,
instrument, agreement, understanding, mortgage, indenture, lease, insurance
policy, permit, concession, grant, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to or which Princeton is
a party or by which any of them are bound, nor will it give rise to any right of
acceleration in the time for performance or any obligation of Princeton under
any contract or instrument, nor will it result in the creation of any lien,
charge, encumbrance of any asset of Princeton,
(xi) Princeton has filed all federal, state, local and foreign tax returns which
are due or has obtained appropriate extensions with respect thereto and all such
returns are true and correct in all material respects as filed; Princeton has
not received any notice of deficiency for assessment of additional taxes and
Princeton is not a party to any action or proceeding by any governmental
authority for assessment or collection of taxes with respect to its Princeton's
federal, state, or local or foreign taxes pending, except for taxes incurred by
Princeton in the ordinary course of business allocable to the most recent
taxable quarter; Princeton has no knowledge of any proposed liability for any
tax to be imposed upon its properties, assets, or business for which there is no
adequate reserve reflected in the balance sheet of Princeton,
(xii) the Princeton Shares are free and clear of all liens, claims, pledges, and
other encumbrances of any nature; the Princeton Shares are not subject to any
contract, agreement, arrangement or understanding, written or otherwise, which
would adversely affect or otherwise prohibit or limit the acquisition of the
Princeton Shares by Charter.
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ARTICLE IV
CONDITIONS PRECEDENT
5.01 Reduction of Liabilities of Charter. (a). the parties to this Agreement
hereby acknowledge that effectiveness of this transaction is subject to Charter,
through Princeton or directly, effectively reducing its outstanding liabilities
to an amount which is acceptable to Princeton. In the event that Charter is
unable to effect the foregoing, within sixty (60) days from the date stated
herein above, this Agreement may be terminated by Princeton at its option.
Notice of such event by Princeton to Charter shall be deemed effective to
terminate this Agreement. (b) In the event Charter can affect the reduction of
liabilities to the satisfaction of Princeton, as described above, the effective
date of this Agreement shall be the date stated herein above.
ARTICLE V
NOTICES
Any notice or other communication required or permitted hereunder shall be made
in writing, and shall be deemed to have been given if placed in the United
States mail, registered and certified, postage prepaid, or if personally
delivered, addresses as follows;
Princeton: Princeton Capital, Inc.
150 River Road, Suite B-3
Montville, New Jersey 07045
Charter: Charter Financial Network, Inc.
PO Box 4676
Wayne, New Jersey 07470
ARTICLE VI
ENTIRE AGREEMENT, MODIFICATION, WAIVER AND HEADINGS
6.01 Entire Agreement; Modification. This Agreement constitutes the entire
Agreement between the parties hereto pertaining to the subject matter herein and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions among the parties, written or otherwise. No
supplement, modification or waiver or termination of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. No waiver
of any of the provisions hereof (whether or not
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similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
6.02 Incorporated by Reference. All exhibits, schedules and documents referred
to in this Agreement are incorporated herein for all purposes.
6.03 Multiple Counterpart Execution: Governing Law. This Agreement may be
executed in multiple counterparts, which each counterpart constituting a binding
agreement between the signatory parties, and with all such counterparts
constituting an integrated document. This Agreement shall be construed and
governed by the laws of the State of New Jersey.
6.04 Binding Effect. The terms and provisions herein shall be binding on the
inure to the benefit or the parties hereto, and their respective transferees,
successors and assigns.
6.05 Survival of Representation and Warranties. All representations, warranties,
and covenants made by the parties herein shall survive the execution of this
Agreement and shall be forever enforceable.
6.06 Severability. If any provision of this Agreement is invalid, illegal or
enforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all persons and circumstances.
IN WITNESS WHEREOF, the parties have caused this Agreement to be effective all
as of the date set forth above.
Princeton Capital, Inc.
______________________________________
President
Charter Financial Network, Inc.
______________________________________
President
