Cal. Code Regs. tit. 10 § 2613.05
For convenient reference, see the following composite example of a form of subscription for stock to be used pursuant to a subscription permit.
CONDITIONAL SUBSCRIPTION FOR STOCK
TO: ABC Life Insurance Company
__________ Wilshire Boulevard
Los Angeles, California 90005
I hereby conditionally offer to purchase __________ shares of the $10 par value capital stock of ABC Life Insurance Company (hereinafter referred to as "Company") for the cash price of $50 per share upon the terms and under the conditions hereinafter set forth. Receipt of a copy of the California Insurance Commissioner's Subscription Permit No. __________, and a copy of this subscription agreement is herewith acknowledged.
It is agreed that the Company has the right to reject this offer, or, in its absolute discretion, to accept it for a number of shares less than the number above indicated.
It is understood that no certificate for shares or other security will be issued by ABC Life Insurance Company, nor will any consideration be collected on account of the shares herewith subscribed for, unless and until within one year from the date of the Subscription Permit Company shall have first applied for and duly obtained a definitive permit from the Insurance Commissioner. It is also understood that any such definitive permit will have additional requirements governing the issue of said shares including, among other things, the impounding of funds until a certificate of authority shall have been duly issued to Company by said Insurance Commissioner.
It is further understood that the shares herein applied for will be subject to all current regulations of the Insurance Commissioner. Those regulations include a requirement that the promoters, organizers, original directors and officers as a group shall purchase for cash at least 25% of the first $1,000,000 and 15% of all amounts of stock in excess of $1,000,000 (net of any commission) worth of stock offered; that such persons are required to execute an agreement providing that, with certain exceptions, for the periods hereinafter specified from and after issuance of a certificate of authority by the Insurance Commissioner (or completion of the original issue,whichever is later) they and each of them will not sell, transfer or encumber, except by operation of law, any shares acquired by them in satisfaction of said requirement or by exercise of promotional options without the Insurance Commissioner's written consent. Said agreement will permit each such person to dispose of the following amounts of the aggregate of said shares after elapsation of the following indicated periods: 5% after one year; an additional 5% after two years; an additional 10% after three years; an additional 20% after four years; and the remainder after five years.
Effectiveness of this subscription is expressly conditioned upon the promoters, organizers, original officers and directors purchasing shares in full compliance with the above mentioned requirement. However, upon the completion by them of such purchase, following the fulfillment of other conditions set forth herein, this subscription shall be irrevocable; whereupon, subscriber agrees to pay the purchase price in cash at Company's home office for shares subscribed to the extend accepted by company, within 30 days after Company's written request therefor subsequent to delivery to me of a copy of the (final)prospectus and the Insurance Commissioner's (definitive) permit and notification by Company that the promoters, organizers and original officers and directors have purchased and paid for their shares.
Provided always, that in the event the Insurance Commissioner's permit (receipt of a copy of which is acknowledged herein above) recites that no findings have as yet been made by him to the effect that sale and issuance of the securities thereby authorized to be subscribed for will be fair, just and equitable; and in the event the permit also specifies that each subscriber shall have an opportunity, within a reasonable time after receipt by him of a copy of the Insurance Commissioner's definitive permit and a copy of the prospectus approved by it, at the subscriber's election to disaffirm and cancel his subscription; --then, in such event, this subscription shall not become binding on me unless I shall receive (a) a copy of the Insurance Commissioner's permit containing such findings, (b) a copy of the prospectus approved by the last-mentioned permit, and (c) notification from Company that the organizers,promoters, original officers and directors have purchased and paid for their shares according to the conditions of said permit; and further, this subscription shall not become binding on me until, within twenty (20) days after receipt of items (a), (b) and (c) above, I shall have reaffirmed this subscription in writing and shall have actually communicated my reaffirmation to Company. In the event I do so, I hereby agree to pay in full as stated above, to the extent my subscription is accepted,within ten (10) days after Company's written request therefor.
___________________________
Mail any further papers to me at
___________________________
___________________________
Dated _______________, 19___
____________________
Subscriber(s)
Accepted for _______________ shares
ABC LIFE INSURANCE COMPANY
By ______________________________
(Title)
Cal. Code Regs. Tit. 10, § 2613.05