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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
DATE OF REPORT (Date of earliest event reported): August 13, 1999
CANTERBURY INFORMATION TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-1558 23-2170505
(State or other juris- (Commission File Number) (IRS Employer
diction of incorporation) Identification No.)
1600 Medford Plaza
Route 70 & Hartford Road
Medford, New Jersey 08055
(Address of Principal Executive Offices)
Registrant's telephone number: (609) 953-0044
CANTERBURY CORPORATE SERVICES, INC.
(Former Name of Registrant)
FORM 8-K
ITEM 5. OTHER EVENTS
On August 13, 1999, the Registrant entered into a Letter of Intent to to
acquire certain assets and assume certain limited liabilities of U.S.
Communications, Inc. ("USC") a wholly owned subsidiary of Condor Technology
Solutions, Inc. (Nasdaq - CNDR), subject to due diligence and a definitive
purchase agreement.
The Registrant will acquire certain existing trade receivables and
payables of USC in exchange for $900,000 worth of the Registrant's restricted
common stock. The number of shares will be determined the day before Closing
by dividing the purchase price of $900,000 by the closing price of the stock
on that date. The number of shares will be rounded off to the nearest whole
share. Condor will deliver to the Registrant at Closing $300,000 more in
guaranteed accounts receivables than accounts payables. The receivables will
be guaranteed and indemnified by Condor as to their collectibility.
The above summary information does not purport to be complete, and is
qualified in its entirety by reference to the Letter of Intent filed as
Exhibit 1 to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
A. Financial Statements:
None.
B. Proforma Financial Statements:
None.
C. Exhibits:
1. Letter of Intent between Canterbury Information Technology,
Inc. and Condor Technology Solutions, Inc. dated August 9, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CANTERBURY INFORMATION TECHNOLOGY, INC.
BY: /s/Stanton M. Pikus
STANTON M. PIKUS, President
Dated: August 20, 1999
EXHIBIT 1
LETTER OF INTENT BETWEEN CANTERBURY INFORMATION TECHNOLOGY, INC.
AND CONDOR TECHNOLOGY SOLUTIONS, INC. TO ACQUIRE CERTAIN ASSETS
AND ASSUME CERTAIN LIMITED LIABILITIES OF U.S. COMMUNICATIONS, INC.
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LETTER OF INTENT
THIS LETTER OF INTENT is being entered into this 9th day of August, 1999
by and between Canterbury Information Technology, Inc., a Pennsylvania
corporation, whose main administrative address is 1600 Medford Plaza, Route
70 and Hartford Road, Medford, New Jersey 08055 (hereinafter referred to as
"CITI" or "Canterbury"); and Condor Technology Solutions, Inc., a Delaware
corporation whose main business address is Annapolis Office Plaza, 170
Jennifer Road, Suite 325, Annapolis, Maryland 21401 (hereinafter Condor
Technology Solutions, Inc. and its subsidiary U.S. Communications, Inc. shall
be referred to as "CONDOR" and/or "USC/Condor").
WITNESSETH:
WHEREAS, the parties hereto desire to enter into a Letter of Intent for
CITI to purchase certain assets and assume certain liabilities of USC/Condor,
a wholly owned subsidiary of Condor;
NOW, THEREFORE, In consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. Subject to the terms and conditions of this Letter of Intent, Condor
agrees to grant CITI the irrevocable right to purchase certain assets
and assume certain liabilities of USC, as set forth in paragraph No. 2
hereof for the purchase price of $900,000 of restricted CITI common
stock payable and calculated as follows:
a. The $900,000 purchase price is to be paid solely in unregistered
CITI common stock (Astock@). The amount of stock shall be determined
the day before Closing by dividing $900,000 by the closing price of
CITI on National Market Nasdaq. The number of shares shall be
rounded off to the nearest whole share.
b. USC/Condor agrees that CITI shall have 30 calendar days to prepare a
definitive Stock for Assets Agreement ("Purchase Agreement") subject
to due diligence of CITI; and then 15 calendar days after execution
of the Purchase Agreement by all parties to close. USC/Condor agrees
to negotiate contract language in good faith and to provide CITI all
access to USC/Condor management, officers and directors in order to
complete the transaction in the time set forth.
c. During the time periods above or any extension thereof, USC/Condor
agree to a standstill provision. They will not negotiate or enter
into any agreement involving any of the USC assets or debts without
CITI's written approval.
The assets and limited liabilities to be sold by USC/Condor to CITI will be set
forth in Schedule A attached to the Closing documents. This schedule will
include existing trade receivables and payables and will not include any cash
at Closing. However, these assets and liabilities are not purported to be
complete. A more detailed Schedule A will be prepared after due diligence by
CITI and included in the Purchase Agreement. USC agrees to provide CITI with
an itemized list of all inventory and assets being sold as soon as possible
but prior to the date of Closing. At Closing, USC/Condor will deliver $300,000
more in guaranteed accounts receivables than CITI will assume in accounts
payable. Indemnification protections will be included in the final contract
language.
3. USC/Condor hereby represents that trade debt, taxes, employee wages,
assets, personal property and accounts shall be fully paid and free and
clear from any and all encumbrances, liens, and debts, except otherwise
to be attached as Exhibit B prior to Closing.
4. Prior to Closing, CITI shall have the right to inspect, audit and examine
records of USC including but not limited to licenses, approvals, financial
records, equipment and any other material in regard to the USC operation,
assets and liabilities. This information shall be confidential until the
ption is exercised and upon the option not being exercised, upon request
such information shall be immediately returned.
5. Survival/Indemnification - All of the representations, warranties,
covenants and agreements of USC contained in this Agreement shall survive
the Closing and continue in full force and effect. In the event,
USC/Condor breaches any representations, warranties, or agreements,
contained herein, then USC/Condor, jointly and severally agrees to
indemnify, defend, and hold CITI free and harmless from and against any
and all costs, including the cost of reasonable attorneys' fee at trial,
expenses, liabilities, damages, claims, complaints, actions, and
proceedings, that CITI may suffer resulting from, arising out of, or
relating to, any such breach including litigation, trade debt above what
is being assumed by CITI, over payments, reimbursement, bank debt or over
drafts, and the like. CITI, in addition to other remedies, shall have
the right to set off the amount of any indemnity payable by CITI to USC.
6. USC agrees to submit income statements, statements of cash flows, balance
sheets and all federal and state income tax returns to CITI along with
any other required documents, for the purpose of this transaction. USC
shall also prepare an acquisition balance sheet for CITI within two weeks.
7. USC/Condor represents that the Board of Directors of both companies have
the right and authority to enter into this transaction without shareholder
approval and by the execution of this Letter of Intent have obtained Board
approvals.
8. USC/Condor additionally represent that its last two fiscal years its
financial statements are able to be audited by an independent certified
public accounting firm under General Accounting Principles consistently
applied without any adverse or contingent opinion all in accordance with
SEC accounting rules.
9. USC/Condor agree that prior to Closing:
a. USC will not transact any business outside of its ordinary business
without written consent by CITI.
b. USC shall not pay, nor shall Condor receive from USC any monies, cash
reduction, management fees, or contingent or otherwise agreed upon
payments of any kind or require USC not to perform or transact any
act that would negatively impact USC or the assets being sold.
10. USC/Condor and its management hereby agree not to compete against CITI and
its subsidiaries in any cities in which USC is currently engaged for a
period of three years.
11. USC and CITI mutually represent to each other that the only broker and/or
finder who has been involved in, or associated with, this transaction has
been Ambassador Capital Corporation and George Shea, its President.
USC/Condor shall have sole responsibility for any and all fees to
Ambassador Capital Corporation and George Shea.
12. Each party shall pay its own expenses incident to preparation for Closing,
including attorney's fees and any other expenses in relation to due
diligence or Closing, except that CITI shall be responsible for any
auditing fees to Ernst & Young, LLP, CITI's auditors.
13. This Letter of Intent is subject to due diligence of CITI.
14. US/Condor agrees that the common stock of CITI that they would receive
at Closing will be subject to a voting agreement with CITI or its
designees. This voting agreement, however, will be removed pro-rata upon
such stock being sold in the public market (so as not to remain a
restriction on sale.)
15. Immediately following Closing, at CITI's sole expense, CITI agrees to file
one S-3 Registration Statement with the SEC to register all of the
purchased shares of USC/Condor.
16. Further, US/Condor agree that CITI or its designees shall have a
continuous 1st right of refusal prior to the sale of any of the CITI
stock being purchased herein as follows:
a. If USC/Condor desires to sell any of its CITI stock on the public
market, if it legally is able to do so, they shall give written
notice to CITI of the amount of stock they desire to sell.
b. Upon USC/Condor's request, CITI or its designees have the right to
purchase up to 1/3 of its CITI stock at a discount of 5% of the
closing bid price on the NASDAQ National Market on the day prior to
their written notice of intention of sale; up to 1/3 of their CITI
stock after 6 months from Closing; and up to 1/3 of their CITI stock
after 9 months from Closing, all on a non-cumulative basis. In the
event CITI exercises its rights above, CITI has 15 business days to
have a closing. In the event CITI or its designees decline their 1st
right of refusal, then USC/Condor may sell their 1/3 portion of their
shares on the open market in each instance, with a maximum of 50,000
shares per week in the public market on a non-cumulative basis.
IN WITNESS WHEREOF, the parties hereto have hereby executed this Agreement.
Date: August 13, 1999 CANTERBURY INFORMATION
TECHNOLOGY, INC.
By: /s/Jean Z. Pikus By: /s/Stanton M. Pikus
Jean Z. Pikus, Secretary Stanton M. Pikus, President
CONDOR TECHNOLOGY
SOLUTIONS, INC.
By: /s/John McCabe By: /s/Daniel Roche
John McCabe, Secretary Daniel Roche, President
U.S. COMMUNICATIONS, INC.
By: /s/John McCabe By: /s/W.J. Caragol
John McCabe, Secretary W.J. Caragol, Vice President
