SUBSCRIPTION AGREEMENT
-----------------------
$35,500 Senior Convertible Promissory Note
Canterbury Consulting Group, Inc.
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Gentlemen:
The undersigned acknowledges that it has reviewed a copy of the
SEC filings of Canterbury Consulting Group, Inc., a Pennsylvania
Corporation, (the "Company") and the Private Placement Memorandum
dated June 3, 2003 in conjunction with the sale of Canterbury Senior
Convertible Promissory Note ("Convertible Note" or "Note"). The
Company is offering this Note on the terms and in the manner described
herein.
It is understood that, upon the execution by and acceptance by
the Company of the undersigned's offer to purchase the Convertible
Note 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 a three-year, 7 3/4% $35,500 Senior Convertible Promissory Note
of Canterbury convertible at the option of the Holder into 100,000
shares of restricted common stock of Canterbury Consulting Group, Inc.
in all or part at any time prior to the term of the Note coming to
maturity (June 2, 2006).
The check and the executed Subscription Agreement should be
delivered to Canterbury Consulting Group, Inc., 000 Xxxxxx Xxxx, Xxxxx
000, Xxxxxxx, XX 00000. A Closing shall occur upon receipt of good
funds and acceptance of the undersigned's offer to purchase a
Convertible Note 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 an acknowledgement of the aforementioned as
soon as practical but no later than 21 days after closing. If this
subscription is rejected by the Company, 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 Company having
the right to reject this subscription, in whole or in part.
3. Representations and Warranties of the Undersigned. The
undersigned understands that the underlying shares to be issued in the
event that the undersigned decides to convert all or part of the
Convertible Note into restricted common shares of Company are 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 this investment without being
furnished any offering literature or prospectus other than the
Company's SEC filings and the Private Placement Memorandum dated June
3, 2003 and 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
"Risk Factors" and understands that these shares are
extremely speculative investment with a high degree
of risk of loss; the Note and the underlying 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 Note and the
underlying 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 it is capable of
evaluating the merits and risks of an investment in the
Note and the underlying Shares and of making informed
investment decision;
(e) The undersigned confirms that, in making its
decision to purchase the Note and the underlying Shares,
it has relied solely upon independent investigations
made by it and/or by its representatives, including its
own professional tax and other advisors, and that it and
such representatives and advisors have been given the
opportunity to ask questions of, and to receive answers
from, officers and directors 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 SEC filings;
(f) The Note and the underlying Shares hereby
subscribed for are being acquired by the undersigned in
good faith solely for its 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 Note and the
underlying 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 it understands that as a result it must
bear the economic risk of the investment for an
indefinite period of time because the Note and the
underlying 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.
(g) The undersigned consents to the placement of a
legend on any shares of restricted common stock he
receives if and when he determines at this sole
discretion to convert any or all of his convertible
note. The legend on the stock certificate(s)
evidencing the Shares being purchased 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.";
(i) The undersigned represents and warrants
that the individual executing this Agreement
has authority to act on its behalf; and
(ii) The undersigned represents and
warrants that it was not organized or
reorganized for the specific purpose of
acquiring Shares and/or Note, 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 it is
an "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/or Note and the undersigned hereby
agrees that such representations and warranties shall survive his purchase of
the Note and/or Shares. By executing this Agreement, the undersigned
represents that it has read and acknowledged each of the representations set
forth above.
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 State 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 SEC filings 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 Note
and/or Shares, will have been taken; and the Note and/or
Shares, when issued and sold 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 Note and/or 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 if
converted, acquired pursuant hereto shall be made only in accordance
with all applicable laws.
6. Revocation. The undersigned agrees that it may not cancel,
terminate or revoke this Agreement or any agreement of the undersigned
made hereunder and that this Agreement shall survive dissolution 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 as
follows:
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
(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 it
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 3rd day of June, 2003.
------------------------------------ By-------------------------
Name of Subscriber (Print Name) Signature of Subscriber
Address:
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AGREED TO AND ACCEPTED BY:
Canterbury Consulting Group, Inc.
By:
Xxxxx XxXxxxxx, President
Dated:
