SUBSCRIPTION AGREEMENT
Agreement (this "Agreement"), made this ---- day of -------------, 2001 by
and between BRITANNIA CAPITAL CORP. a Delaware corporation (the "Company") and
---------------------------------------------- ("Subscriber"). In consideration
of the mutual promises and covenants herein contained, the parties hereto (the
"Parties") agree as follows:
ARTICLE I
SUBSCRIPTION
1.01 Subscription Offer. Subject to the terms and conditions hereof and to
acceptance by the Company, the Subscriber hereby irrevocably offers to
purchase ------------------ Units (the "Securities"), each Unit
consisting of one share of Common Stock and one Class "A" Warrant, one
Class "B" Warrant, one Class "C" Warrant and one Class "D" Warrant at a
purchase price of $.05 per Unit, for a total purchase price of
$-------------------. The price is payable in full by check payable to
"Xxxxx Xxxxx Co. on behalf of Britannia Capital Corp." or by wire
transfer or money order.
1.02 Acceptance of Subscription. The Company reserves the right to reject
the Subscriber's offer in whole or in part, for any reason, and to
allocate less than the maximum number of Securities the Subscriber
hereby offers to purchase. Any sale of Securities to the Subscriber
shall not be deemed to occur until the Subscribers' offer is accepted
in writing by the Company. The Subscriber shall not have any recourse
against the Company if a purchase offer is rejected in whole or in
part. The Company shall reasonably notify the Subscriber in writing of
the acceptance of a purchase offer. If the offer is rejected in whole
or in part, the Company will promptly return to the Subscriber, without
deduction or interest, all or a ratable portion of the subscription
price, as the case may be, together with all executed documents
tendered by the Subscriber. If the purchase offer is rejected in part
only, the Subscriber shall immediately complete, execute, and deliver
to the Company new subscription documents for the appropriate reduced
amount.
1.03 Escrow of Funds and Certificate and Restriction on Transfer of
Securities. The Securities have been registered under the Securities
Act of 1933 (the "1933 Act") pursuant to Rule 419 thereto.
Rule 419 requires that before the Securities can be released, the
Company must first execute an agreement to acquire a business. The
agreement must provide for the acquisition of a business or assets for
which the fair value of the business represents at least 80% of the
maximum offering proceeds, including funds received or to be received
from the exercise of warrants.
Once the acquisition agreement has been executed, Rule 419 requires the
Company to update the registration statement with a post-effective
amendment. The post-effective amendment must contain information about:
-- the proposed acquisition candidate and its business, including audited
financial statements;
-- the results of the offering; and
-- the use of the funds disbursed from the escrow account.
The post-effective amendment must also include the terms of the
reconfirmation offering.
The reconfirmation offer must commence within five business days after the
effective date of the post-effective amendment and must include the following
conditions:
-- the prospectus contained in the post-effective amendment will be sent
to each Subscriber within five business days after the effective date
of the post-effective amendment;
-- each Subscriber will have no fewer than 20, and no more than 45,
business days from the effective date of the post-effective amendment
to notify the Company in writing that he or she elects to remain a
Subscriber;
-- if the Company does not receive written notification from any
Subscriber within 45 business days following the effective date, the
Subscriber's escrowed securities will be returned to the Company and
the Subscriber's escrowed funds to the Subscriber;
-- unless Subscribers representing 80% of the maximum offering proceeds
elect to remain Subscribers, the acquisition of the target business
would be prevented, deposited securities held in escrow will be
returned to the Company and the funds to the Subscribers; and
-- if a consummated acquisition has not occurred within 18 months from the
date of this prospectus, the deposited securities held in the escrow
account will be returned to the Company and the funds to the
Subscribers.
The Securities may be released to Subscribers after the escrow agent has
received a signed representation from the Company and any other evidence
acceptable by the escrow agent that:
-- the Company has executed an agreement for the acquisition of a business
for which the value of the business represents at least 80% of the
maximum offering proceeds and the Company has filed the required
post-effective amendment;
-- the post-effective amendment has been declared effective;
-- the reconfirmation offer has been completed;
-- the Company has satisfied all of the prescribed conditions of the
reconfirmation offer; and
-- the acquisition of the business with the fair value of at least 80% of
the maximum proceeds has been consummated.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01 Status of Subscriber. The Subscriber, if an individual, is at least 21
years of age. If an association, each individual of the association is
at least 21 years of age.
2.02 Access to Information. Because of the Subscriber's business or
financial experience or his professional advisors who are unaffiliated
with and who are not compensated by the Company, or any affiliate
thereof, the Subscriber has the capacity to protect his own interests
in connection with the offer and sale of the Securities.
The Subscriber represents has received and retained the Company's
prospectus (the "Prospectus") and has carefully read and understood it,
particularly the section entitled "Risk Factors."
2.03 Understanding of Investment Risks. The Subscriber understands that
there is no market for the Securities and no assurance that a market
will develop, and that realization of the objectives of the Company is
subject to significant economic and business risks as set forth in the
Prospectus.
2.04 Residence of the Subscriber. The residence of the Subscriber set forth
below is the true and correct residence of Subscriber and the
Subscriber has no present intention of becoming a resident of
domiciliary of any other state, country, or jurisdiction.
2.05 Further Assurance. Subscriber will execute and deliver to the Company
any document, or do any other act or thing, which the Company may
reasonably request in connection with the acquisition of the
Securities.
2.06 Ability to Bear Economic Risk. The Subscriber is an "accredited
investor" as defined in rules to the 1933 Act or is otherwise qualified
under the jurisdiction of the Subscriber's residence to make this
investment. The Subscriber is able to bear the economic risk of an
investment in the Securities and to maintain the investment in the
Securities for an indefinite period of time, and, further, could bear a
total loss of the investment and not change the Subscriber's standard
of living which existed at the time of the investment.
2.07 For Partnership, Corporations, Trusts or Other Entities Only. If the
Subscriber is a partnership, corporation, trust, or other entity:
The Subscriber has the full power and authority to execute this
subscription Agreement on behalf of the 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 the entity and is not prohibited by the governing
documents of the entity.
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2.08 For Residents of British Columbia Only.
(a) The Company is a non-reporting company and a private issuer
under applicable laws and regulations of British Columbia and
the Securities to be issued upon acceptance of this
Subscription will be issued as an exempt trade, based upon the
relationship between the Company and the Subscriber. The
Subscriber is aware that no prospectus has been prepared or
filed by the Company with the British Columbia Securities
Commission in connection with the issuance of the Securities
and that as a result:
(i) the Subscriber may be restricted from using some of
the civil remedies available under certain British
Columbia securities statutes, rules or regulations;
(ii) the Subscriber may not receive information that would
otherwise be required to be provided to a subscriber
under certain British Columbia securities statutes,
rules or regulations; and
(iii) the Company is relieved from certain obligations and
reporting requirements that would otherwise apply
under certain British Columbia securities statutes,
rules and regulations.
(b) The Subscriber is either a relative, close personal friend or
business associate of an officer or director of the Company;
or is a person who through prior business or investment
dealings or other associations with the Company and its
principals has common bonds of interest or association with
the Company and its principals; or is an entity controlled by
any such a person;
(c) The Subscriber is an investor who, by virtue of his or her own
net worth and investment experience, is able to evaluate the
merits of and risks associated with the Securities as an
investment;
(d) the Subscriber is purchasing the Securities for investment
only and for the Subscriber's own account and not with a view
to any resale or distribution thereof and it is able and
prepared to bear the economic risk of investing in and holding
the Securities indefinitely;
(e) the Subscriber is aware that there is no current market for
the Shares and that the ability to sell such Securities is
severely restricted by applicable securities legislation;
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(f) the Subscriber will duly complete, execute and deliver all
documentation as may be required by applicable securities
legislation;
(g) the Subscriber's decision to enter into this Agreement and
purchase the Securities has not been made in reliance upon any
investment advice, or oral or written representation as to
fact or otherwise made by or on behalf of the Company or any
other person;
(h) to the Subscriber's knowledge, the Securities were not
advertised in printed media of general and regular paid
circulation, radio or television;
(i) no person has made to the Subscriber any written or oral
representations:
(i) that any person will resell or repurchase the Shares;
(ii) that any person will refund the purchase price of the
Shares;
(iii) as to the future price or value of the Shares; or
(iv) that the Shares will be listed and posted for trading on an
exchange or that application has been made to list and post
the Shares for trading on an exchange;
(j) the Subscriber has been advised to consult his/her/its own
legal and tax advisors with respect to applicable resale
restrictions and applicable tax considerations and the
Subscriber is solely responsible (and the Company is in no way
responsible) for compliance with applicable resale
restrictions and applicable tax legislation.
ARTICLE III
MISCELLANEOUS PROVISIONS
3.01 Captions and Headings. The Article and Section headings throughout this
Agreement are for convenience of reference only and shall in no way be
deemed to define, limit or add to any provision of this Agreement.
3.02 Entire Agreement; Amendment. This Agreement states the entire agreement
and understanding of the Parties and shall supersede all prior
agreements and understandings. No amendment of the Agreement shall be
made without the express written consent of the Parties.
3.03 Severability. The invalidity or unenforceability of any particular
provision of this Agreement shall not affect any other provision
hereof, which shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
3.04 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware for contracts made
and to be performed within the State of Delaware.
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3.05 Notices. All notices, requests, demands, consents, and other
communications hereunder shall be transmitted in writing and shall be
deemed to have been duly given when hand-delivered or sent by certified
mail, postage prepaid, with return receipt requested, addressed to the
Parties as follows: to the Company, 0000 Xxxx 00xx Xxxxxx Xxxxxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0 and to the Subscriber, at the address
indicated below. Any Party may change his/her/its address for purposes
of this Section by giving notice as provided herein.
IN WITNESS WHEREOF, the Parties have executed this Agreement the day and
year first above written.
BRITANNIA CAPITAL CORP.
The Subscriber
---------------------- By:
---------------------- ----------------------------
---------------------- Authorized Officer
----------------------
(Address)
