EXHIBIT 10.12
SUBSCRIPTION AGREEMENT DATED APRIL 26, 1999
BETWEEN EMPRESAS FLAGLER, S.A.
AND THE REGISTRANT
FOR PRIVATE PLACEMENT
EXHIBIT A
SUBSCRIPTION AGREEMENT
$.71 Per Share
Canterbury Information Technology, Inc.
0000 Xxxxxxx Xxxxx
Xxxxx 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 April 9, 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 1,000,000 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 211,268
Shares. Except as provided immediately below, the undersigned tenders
herewith a check (the "Check") or wire transfer in an amount of $ 150,000,
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 000, Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx, 00000, (000) 000-0000.
After the minimum of 350,000 shares ($210,000) 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 350,000 shares have not been
sold by April 20, 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 29th day of April, 1999.
EMPRESAS FLAGLER, S.A. /s/Xxxx Xxxxxx, President
Name of Subscriber (Print Name) Authorized Signature of
Subscriber
#0 Xxxxxxx X. Xxx Xxxxxx
Bahamas
Address
Name of Co-subscriber (Print Name) Authorized Signature of
Co-subscriber
Address
AGREED TO AND ACCEPTED BY:
CANTERBURY INFORMATION TECHNOLOGY, INC.
By: /s/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
Dated: April 26, 1999
