EXHIBIT 10.14
SUBSCRIPTION AGREEMENT DATED OCTOBER 28, 1999
BETWEEN CHIVAS HOLDINGS, LTD.
AND REGISTRANT FOR PRIVATE PLACEMENT
EXHIBIT A
SUBSCRIPTION AGREEMENT
$1.0625 Per Share
Canterbury Information Technology, Inc.
1600 Medford Plaza
Route 70 and Hartford Road
Medford, NJ 08055
Gentlemen:
The undersigned acknowledges that he or she has received and reviewed
a copy of the Private Placement Memorandum dated September 14, 1999 of
Canterbury Information Technology, Inc., a Pennsylvania Corporation (the
"Company"), (the Confidential Offering Memorandum or Memorandum). The
Memorandum relates to the private placement of a maximum of 470,590
shares of common stock (the "Shares") of the Company being offered
herewith. The Company is offering the Shares on the terms and in the
manner described in the Memorandum.
It is understood that, upon the acceptance by the Company of the
undersigned's offer to purchase the number of Shares set forth herein, the
undersigned will receive a copy of this executed Subscription Agreement
executed on behalf of the Company.
1. Subscription. Subject to the terms and conditions hereof, the
undersigned hereby irrevocably subscribes for and agrees to purchase
282,353 Shares. Except as provided immediately below, the undersigned
tenders herewith a check (the "Check") or wire transfer in an amount of
$300,000 payable to the order of "Levy & Levy, P.A. Attorney Trust
Account". At the sole discretion of the Company, the Company may allow
less than $100,000 of shares to be purchased by an individual investor.
The Check or wire transfer and this Subscription Agreement that is
Exhibit A to the Memorandum should be delivered to Levy & Levy, P.A.,
Plaza 1000, Suite 309, Main Street, Voorhees, New Jersey, 08043, (609)
751-9494. After the minimum of 188,236 shares ($200,000) has been sold
prior to the termination date, a Closing shall occur upon receipt of good
funds and acceptance of the undersigned's offer to purchase the number of
Shares set forth herein (the date on which the undersigned's offer to
purchase shares is accepted being the "Closing Date"). The Company must
also deliver stock certificates within ten business days of the Closing.
If this subscription is rejected by the Company, or the minimum of 188,236
shares have not been sold by September 17, 1999, then the proceeds in an
amount equal to the amount tendered by the investor shall be promptly
returned in full to the undersigned, without interest, and this Agreement
shall be rendered by the Company null and void and of no further force or
effect.
2. Acceptance of Subscription. The undersigned understands and
agrees that this subscription is made subject to the following terms and
conditions:
(a) The Company shall have the right to reject this subscription, in
whole or in part; and
(b) The Company shall have no obligation to accept subscriptions for
Shares in the order received.
3. Representations and Warranties of the Undersigned. The
undersigned understands that the Shares are being offered and sold
pursuant to the exemption from registration provided for in Section 4(2)
of the Securities Act of 1933, as amended, (the "Act"), and Rule 506 of
Regulation D promulgated thereunder. The undersigned further understands
that he is purchasing the Shares without being furnished any offering
literature or prospectus other than the Memorandum, that no documents
relating to this private placement as such have been filed with or
reviewed by the Securities and Exchange Commission or by any
administrative agency charged with the administration of the securities
laws of any state. All documents, records and books pertaining to this
investment have been made available to the undersigned and his
representatives, including without limitation his attorney and/or his
accountant, and that the books and records of the Company will be
available upon reasonable notice for inspection by investors during
reasonable business hours at its principal place of business. In addition
the undersigned hereby represents and warrants as follows:
(a) The undersigned (X) if an individual (I) is a citizen of
the United States, and at least 21 years of age, and (ii)
is a bonafide permanent resident of and is domiciled in the
State set forth on the signature page hereof and has no
present intention of becoming a resident of any other State
or jurisdiction, or (Y) if a partnership, trust,
corporation or other entity, has a principal place of
business and is domiciled in the State as set forth on the
signature page thereof and has no present intention of
changing its principal place of business or its domicile to
any other state or jurisdiction;
(b) The undersigned has read and fully considered the section
in the Memorandum entitled "Risk Factors" and understands
that shares are extremely speculative investments with a
high degree of risk of loss, and there will be no public
market for the Shares and it may not be possible to
liquidate an investment in the Shares; Common stock has not
been registered under the Act or State Securities Laws and
may not be sold until such Common Stock is registered under
the Act or an exemption from such registration is
available.
(c) The undersigned is able (i) to bear the economic risk of
this investment, (ii) to hold the Shares indefinitely, and
(iii) presently to afford a complete loss of this
investment; the undersigned has adequate means of providing
for current needs and personal contingencies, and has no
need for liquidity in this investment;
(d) The undersigned has such knowledge and experience in
financial and business matters that he/she is capable of
evaluating the merits and risks of an investment in the
Shares and of making informed investment decision;
(e) The undersigned confirms that, in making his decision to
purchase the Shares, he/she has relied solely upon
independent investigations made by him/her and/or by
his/her representatives, including his own professional tax
and other advisors, and that he and such representatives
and advisors have been given the opportunity to ask
questions of, and to receive answers from, officers of the
Company and Counsel to the Company concerning the terms and
conditions of this offering, and to obtain any additional
information, to the extent such persons possess such
information or can acquire it without unreasonable effort
or expense, necessary to verify the accuracy of the
information set forth in the Memorandum;
(f) The Shares hereby subscribed for are being acquired by
the undersigned in good faith solely for his/her own
personal account, for investment purposes only, and are not
being purchased for resale, resyndication, distribution,
subdivision or fractionalization thereof; the undersigned
has no contract or arrangement with any person to sell,
transfer or pledge to any person the Shares or any part
thereof, any interest therein or any rights thereto; the
undersigned has no present plans to enter into any such
contract or arrangement; and he/her understands that as a
result he/she must bear the economic risk of the investment
for an indefinite period of time because the Shares have
not been registered under the Act and, therefore, cannot be
sold unless they are subsequently registered under the Act
or an exemption from such registration under the Act is
available.
(f-1) The Purchaser acknowledges that, except for the historical
material contained herein or in the Securities and Exchange
Commission ("SEC") documents attached as Exhibits to the
Memorandum (the "SEC Documents"), the matters disclosed
herein and therein are forward-looking statements under the
federal securities laws that involve risks and
uncertainties, including, but not limited to, product
demand and market acceptance risks, the effect of economic
conditions, the impact of competitive products and pricing,
product constraints or difficulties, the results of
financing efforts, actual purchases under agreements, the
effect of the Company's accounting policies, and other
risks detailed in the company's SEC Documents. Actual
results could differ materially from those estimated or
anticipated in these forward-looking statements.
(f-2) The Purchaser is a resident of the state set forth on the
signature page hereto.
(g) The undersigned consents to the placement of a legend,
until the common shares are registered, on the stock
certificates evidencing the Shares being purchased, which
legend shall be in a form substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SALE OR
OTHER DISPOSITION OF THE SHARES IS PROHIBITED UNLESS THE
COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH SALE OR OTHER DISPOSITION
CAN BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933. BY ACQUIRING THE SHARES REPRESENTED HEREBY THE
HOLDER REPRESENTS THAT HE HAS ACQUIRED SUCH SHARES FOR
INVESTMENT AND THAT HE WILL NOT SELL OR OTHERWISE DISPOSE
OF THESE SHARES WITHOUT REGISTRATION OR OTHER COMPLIANCE
WITH THE AFORESAID ACT AND THE RULES AND REGULATIONS
THEREUNDER.";
(g-1) The undersigned represents that he is an "institutional
investor" or "accredited investor," as such term is defined
in Rule 501 of Regulation D under the Act.
(h) FOR PARTNERSHIPS, CORPORATIONS, TRUSTS, OR OTHER
ENTITIES ONLY: If the undersigned is a partnership,
corporation, trust or other entity;
(i) The undersigned has enclosed with this Agreement
appropriate evidence of the authority of the
individual executing this Agreement to act on its
behalf (i.e., if a trust, a copy of the trust
agreement; if a corporation, a certified corporation
resolution authorizing the signature and a copy of the
articles of incorporation; or if a partnership, a copy
of the partnership agreement),
(ii) The undersigned represents and warrants that it was
not organized or reorganized for the specific purpose
of acquiring Shares, and
(iii) The undersigned has the full power and authority
to execute this Subscription Agreement on behalf
of such entity and to make the representations
and warranties made herein on its behalf and
this investment in the Company has been
affirmatively authorized by the governing board
of such entity and is not prohibited by the
governing documents of the entity; and
(iv) The undersigned represents that he is an
"institutional investor" or "accredited investor," as
such term is defined in Rule 501 of Regulation D under
the Act.
The foregoing representations and warranties and undertakings, are
made by the undersigned with the intent that they be relied upon in
determining his suitability as a purchaser of the Shares and the
undersigned hereby agrees that such representations and warranties shall
survive his purchase of the Shares. By executing this Agreement, the
undersigned represents that he has read and acknowledged each of the
representations set forth above.
If more than one person is signing this Agreement, each
representation and warranty and undertaking made herein shall be a joint
and several representation, warranty or undertaking of each such person.
4. Representations and Warranties of the Company.
(a) The Company has been duly and validly incorporated and is
validly existing and in good standing as a corporation under the laws of
the Commonwealth of Pennsylvania. The Company has all requisite power and
authority, and all necessary authorizations, approvals and orders required
as of the date hereof to own its properties and conduct its business as
described in the Memorandum and to enter into this Subscription Agreement
and to be bound by the provisions and conditions hereof.
(b) All corporate action required to be taken by the Company
prior to all the issuance and sale of the Shares has been, or prior to the
Closing of the sale of the Shares, will have been taken; the Shares will
conform to the descriptions thereof in the Memorandum; and the Shares,
when issued and sold in accordance with the Memorandum for the
consideration expressed therein shall be duly and validly issued, and, in
the case of the Common Stock, fully paid and nonassessable and free of
preemptive rights. The Shares have been duly and validly authorized by
proper corporate authority.
5. Transferability. The undersigned agrees not to transfer or
assign this Agreement, or any portion of his interest herein, and further
agrees that the assignment and transfer of the Shares acquired pursuant
hereto shall be made only in accordance with all applicable laws.
6. Revocation. The undersigned agrees that he may not cancel,
terminate or revoke this Agreement or any agreement of the undersigned
made hereunder and that this Agreement shall survive the death or
disability of the undersigned and shall be binding upon the undersigned's
heirs, executors, administrators, successors and assigns.
7. No Waiver. Notwithstanding any of the representations,
warranties, acknowledgments or agreements made herein by the undersigned,
the undersigned does not hereby or in any other manner waive any rights
granted to him under Federal or state securities laws.
8. Miscellaneous.
(a) All notices or other communications given or made hereunder
shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the
undersigned at the address set forth below or to the Company at the
address set forth above.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
9. Waiver of Suitability Standards. The Company reserves the right
to review the suitability of any person (or entity) as the Company deems
appropriate under applicable law.
10. Continuing Effect of Representations, Warranties and
Acknowledgments. The undersigned represents that representations and
warranties contained in Section 3 hereof of the undersigned and the
Company represents that the representations of the Company contained in
Section 4 hereof are true and accurate as of the date of this Subscription
Agreement and shall be true and accurate as of the Closing Date and shall
survive the Closing. If, in any respect, such representations, warranties
and acknowledgments shall not be true and accurate prior to the Closing
Date, the undersigned, or the Company, as the case may be, shall give
immediate written notice of such fact to the Company, in the case of
representations, warranties and acknowledgments of the undersigned in the
case of the representations, warranties and acknowledgments of the
Company, as applicable, specifying which representations, warranties and
acknowledgments are not true and accurate and the reasons therefor.
11. Indemnification. The undersigned acknowledges that he
understands the meaning and legal consequences of the representations and
warranties contained in Section 3 hereof, and he hereby agrees to
indemnify and hold harmless the Company and its officers and directors
from and against any and all loss, damage or liability (including costs
and reasonable attorney fees) due to or arising out of a breach of any
representation, warranty or acknowledgment of the undersigned contained in
this Subscription Agreement.
It is understood that all documents, records and books pertaining to
this investment have been made available to the undersigned and his
attorney and/or accountant and that the books and records of the Company
will be available upon reasonable notice for inspection by investors
during reasonable business hours at its principal place of business.
IN WITNESS WHEREOF, the undersigned has hereby executed this
Agreement this 28th day of October, 1999.
Chivas Holdings, Ltd. /S/Iain H.T. Brown , President
Name of Subscriber (Print Name) Authorized Signature of
Subscriber
#3 Nautica, The Grove
P.O. Box CB11728 Nassau, Bahamas
Address
AGREED TO AND ACCEPTED BY:
CANTERBURY INFORMATION TECHNOLOGY, INC.
By: /s/Stanton M. Pikus
Stanton M. Pikus, President
Dated: October 29, 1999