PALOMAR ENTERPRISES, INC.
SUBSCRIPTION AGREEMENT
Palomar Enterprises, Inc.
000 Xxxxxxxxxx, Xxxxx 000-X
Xxxxxxx, Xxxxxxxxxx 00000
Re: Purchase of shares of the Preferred stock in Palomar Enterprises,
Inc.
Gentlemen:
1. Subscription. The undersigned hereby applies to purchase the number
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of shares of the Preferred stock in Palomar Enterprises, Inc., a Nevada
corporation (the "Company") indicated below in accordance with the terms of this
Subscription Agreement and the placement materials relating to the offering (the
"Offering") of the shares of the Preferred stock (such placement materials,
including all financial statements, exhibits and schedules contained therein or
attached thereto, and any amendments and supplements thereto, is hereinafter
referred to as the "Offering Materials"). Any capitalized terms used herein
shall have the same meaning as used in the Offering Materials. The undersigned
has received a copy of the Offering Materials. The shares of the Preferred
stock are being offered by the Company. Subject to the terms and conditions of
the Offering Materials and this Subscription Agreement, the undersigned hereby
irrevocably offers to purchase 23,000,000 (23 mio) shares of the Preferred stock
and therefore tenders to the Company a check payable to "Palomar Enterprises,
Inc." in the amount of 400,000 EUR for the shares of the Preferred stock. The
amount is payable in 3 blocks (first block: 120,000 EUR, second block: 140,000
EUR, third block: 140,000 EUR). The first block will be paid within 30 days of
execution of this Agreement. It is understood that the cash contribution
tendered is irrevocable by the undersigned and may be deposited for collection
in accordance with the Offering Materials, regardless and independent of the
sale of any other shares of the Preferred stock in the Company. The check
tendered shall promptly returned to the undersigned if the purchase is not
accepted by the Company pursuant to the terms and conditions specified in the
Offering Materials.
2. Acceptance and Subscription. The undersigned understands and agrees
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that this subscription is made subject to the following terms and conditions:
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(a) The Company will have the right to reject this subscription, in
whole or in part.
(b) This subscription will be deemed to be accepted by or on behalf
of the Company only when it is signed by the Company.
(c) The Company will have no obligation to accept subscriptions for
the shares of the Preferred stock in the order received.
(d) The Offering may be terminated at any time by the Company prior
to the final acceptance of subscriptions for the required number of the shares
of the Preferred stock as specified in the Offering Materials.
3. Representations and Warranties. The undersigned represents and
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warrants as follows:
(a) The undersigned has received information, and has carefully
reviewed the Offering Materials and has relied on the disclosures contained
therein, information otherwise provided to him in writing by the Company, or
information from books and records of the Company. The undersigned understands
that all documents, records and books pertaining to this investment have been
made available for inspection by his attorney and/or his accountant and/or his
Purchaser Representative and him, 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. The
undersigned and/or his adviser(s) have had a reasonable opportunity to ask
questions of and receive answers from the Company, or a person or persons acting
on its behalf, concerning the Offering of the shares of the Preferred stock, and
all such questions have been answered to the full satisfaction of the
undersigned. No oral representations have been made or oral information
furnished to the undersigned or his adviser(s) in connection with the Offering
of the shares of the Preferred stock were in any way inconsistent with the
information furnished.
(b) The undersigned (i) has adequate means of providing for his
current needs and possible personal contingencies, (ii) has no need for
liquidity in this investment, (iii) is able to bear the substantial economic
risks of an investment in the shares of the Preferred stock for an indefinite
period, and (iv) at the present time, could afford a complete loss of such
investment.
(c) The undersigned recognizes that the Company has a limited
financial and operating history and no history of profitable operations, and
that the shares of the Preferred stock as an investment involves special risks,
including those disclosed to the undersigned by the Company.
(d) The undersigned understands that the shares of the Preferred
stock have not been registered under the United States Securities Act of 1933,
as amended (the "Securities Act") or the securities laws of any state of the
United States or foreign jurisdiction, in reliance upon an exemption therefrom
for offers and sales of securities made outside of the United States pursuant to
Regulation S promulgated under the Securities Act. The undersigned understands
that the shares of the Preferred stock must be held indefinitely unless they are
subsequently registered, or an exemption from such registration is available.
The undersigned further understands that the Company is under no obligation to
register the shares of the Preferred stock on his behalf or to assist him in
complying with any exemption from registration.
(e) The undersigned or his advisers have such knowledge and
experience in financial, tax, and business matters to enable him to utilize the
information, made available to him in connection with the Offering of the shares
of the Preferred stock to evaluate the merits and risks of the prospective
investment and to make an informed investment decision with respect thereto.
(f) The undersigned is not a U.S. person and that at the time of the
execution of this Subscription Agreement he is outside of the United States.
(g) That if the purchase of the shares of the Preferred stock is made
through a physical trading floor of an established foreign securities exchange,
the transaction is executed in, or through a physical trading floor of an
established foreign securities exchange that is located outside of the United
States.
(h) That if the undersigned effects a resale of the shares of the
Preferred stock in, or through the facilities of a designated offshore
securities market of an established foreign securities exchange, neither the
seller nor any person acting on its behalf, the transaction shall not be
pre-arranged with a buyer in the United States.
(i) The undersigned is not acquiring the shares of the Preferred
stock for the account or benefit of any U.S. person nor is a U.S. person who
purchased the shares of the Preferred stock in a transaction that did not
require registration under the Securities Act.
(j) The undersigned is not aware of any directed selling efforts with
respect to the shares of the Preferred stock made in the United States by the
Company, a distributor, any of their respective affiliates, or any person acting
on their behalf.
(k) The undersigned agrees to resell such shares of the Preferred
stock only in accordance with the provisions of Regulation S, pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration.
(l) The undersigned agrees not to engage in hedging transactions with
regard to such shares of the Preferred stock unless in compliance with the
Securities Act.
(m) The undersigned realizes that he may not be able to sell or
dispose of his shares of the Preferred stock. In addition, the undersigned
understands that his right to transfer the shares of the Preferred stock will be
subject to restrictions against transfer unless the transfer is not in violation
of the Securities Act, and the securities laws of any state or foreign
jurisdiction (including investor suitability standards). The undersigned also
acknowledges that he shall be responsible for compliance with all conditions on
transfer imposed by the Securities Act, or the securities law of any state or
foreign jurisdiction and for any expenses incurred in connection with such a
proposed transfer.
(n) The undersigned, if a corporation, partnership, trust, or other
entity, is authorized and otherwise duly qualified to purchase and hold the
shares of the Preferred stock.
(o) All information which the undersigned has provided to the Company
concerning himself, his financial position, and his knowledge of financial and
business matters, or, in the case of a corporation, partnership, trust or other
entity, the knowledge of financial and business matters of the person making the
investment decision on behalf of such entity, is correct and complete as of the
date set forth at the end hereof, and if there should be any adverse change in
such information prior to his subscription being accepted, he will immediately
provide the Company with such information.
(p) A legend in substantially the following form has been or will be
placed on any certificate(s) or other document(s) evidencing the shares of the
Preferred stock:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAW OF ANY STATE OF
THE UNITED STATES OR FOREIGN JURISDICTION. THE TRANSFER OF THESE
SECURITIES IS PROHIBITED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO
REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THESE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
Stop transfer instructions to the transfer agent of the shares of the
Preferred stock have been or will be placed with respect to the shares of the
Preferred stock so as to restrict the resale or transfer thereof, subject to the
further items hereof, including the provisions of the legend set forth above,
and the legend and stop transfer instructions described herein will be placed
with respect to any new certificate(s) or other document(s) issued upon
presentment by the undersigned of certificate(s) or other document(s) for
transfer.
(q) The undersigned acknowledges: (i) that he can bear the economic
risk of this investment; (ii) he has relied upon the advice of such Purchaser
Representative as to the merits of an investment in the Company and the
suitability of such investment for the undersigned; and (iii) such Purchaser
Representative has confirmed to him, in writing, any past, present or future
material relationship, actual or contemplated, between such Purchaser
Representative or its affiliates and the Company, or its affiliates.
(r) The undersigned understands that neither the United States
Securities and Exchange Commission nor the securities commission of any state of
the United States or foreign jurisdiction has made any finding or determination
relating to the fairness for public investment in the shares of the Preferred
stock and that the United States Securities and Exchange Commission as well as
the securities commission of any state of the United States or foreign
jurisdiction will not recommend or endorse any offering of securities.
(s) The undersigned understands that:
(i) No assurances are or have been made regarding any economic
advantages (including tax) which may inure to the benefit of the undersigned;
(ii) No assurances are or have been made concerning the
distribution of profits to the Company's investors; and
(iii) He is aware that this subscription is independent of any
other subscription for the shares of the Preferred stock.
(t) The undersigned acknowledges and is aware that it never has been
represented, guaranteed, or warranted to him by the Company, its directors,
officers, agents or employees, or any other person, expressly or by implication,
as to any of the following:
(i) The approximate or exact length of time that he will be
required to remain as an owner of his shares of the Preferred stock;
(ii) The percentage of profit and/or amount of or type of
consideration, profit or loss to be realized, if any, as a result of this
investment; or
(iii) That the limited past performance or experience on the part
of the Company, or any future projections will in any way indicate the
predictable results of the ownership of the shares of the Preferred stock or of
the overall financial performance of the Company.
(u) The undersigned acknowledges that the Company has made available
to him or his Purchaser Representative, if any, or other personal advisers the
opportunity to obtain additional information to verify the accuracy of the
information furnished to him and to evaluate the merits and risks of this
investment.
(v) The undersigned confirms that he has consulted with his Purchaser
Representative, if any, or other personal advisers and that said Purchaser
Representative or other advisers have analyzed the information furnished to him
and the documents relating thereto on his behalf and have advised him of the
business and financial aspects and consequences of and liabilities associated
with his investment in the shares of the Preferred stock. The undersigned
represents that he has made other risk capital investments or other investments
of a speculative nature, and by reason of his business and financial experience
and of the business and financial experience of those persons he has retained to
advise him with respect to investments of this nature. In reaching the
conclusion that he desires to acquire the shares of the Preferred stock, the
undersigned has carefully evaluated his financial resources and investments and
acknowledges that he is able to bear the economic risks of this investment.
(w) The undersigned acknowledges that all information made available
to him and/or his Purchaser Representative, if any, and/or personal adviser(s)
in connection with his investment in the shares of the Preferred stock,
including the information furnished to him is and shall remain confidential in
all respects and may not be reproduced, distributed or used for any other
purpose without the prior written consent of the Company.
4. Indemnification. The undersigned agrees to indemnify and hold
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harmless the Company and its affiliates from and against all damages, losses,
costs, and expenses (including reasonable attorneys' fees) which they may incur
by reason of the failure of the undersigned to fulfill any of the terms or
conditions of this subscription, or by reason of any breach of the
representations and warranties made by the undersigned herein, or in any
document provided by the undersigned to the Company.
5. Limitation on Transfer of the Shares of the Preferred Stock. The
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undersigned acknowledges that he is aware that there are substantial
restrictions on the transferability of the shares of
the Preferred stock. Since the shares of the Preferred stock will not be, and
since the undersigned has no right to require that they be, registered under the
Securities Act, or the securities laws of any state of the United States or
foreign jurisdiction, the shares of the Preferred stock may not be, and the
undersigned agrees that it shall not be, sold except pursuant to an effective
registration statement or an exemption from such registration statement under
said statutes.
6. Refusal to Register Transfers by the Company. The Company shall
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refuse to register any transfer of its securities not made in accordance with
the provisions of Regulation S, pursuant to registration under the Securities
Act, or pursuant to an available exemption from registration; provided, however,
if the securities are in bearer form or foreign law prevents the Company from
refusing to register securities transfers, other reasonable procedures (such as
a legend described in Regulation S) shall be implemented to prevent any transfer
of the securities not made in accordance with the provisions of Regulation S.
7. Survival. The foregoing representations, warranties and undertakings
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are made with the intent that they may be relied upon in determining the
undersigned's suitability as an investor in the Company and the undersigned
hereby agrees that such representations and warranties shall survive his
purchase of the shares of the Preferred stock in the Company. The undersigned
hereby acknowledges and agrees that he is not entitled to cancel, terminate or
revoke this Subscription Agreement, or any agreements hereunder, unless the
Company has extended the Offering beyond the period specified in the Offering
Materials, and that this Subscription Agreement and such agreements shall
survive (a) changes in the transactions, documents, and instruments previously
furnished to the undersigned which are not materially adverse, and (b) the
undersigned's death or disability provided, however, that if the Company shall
have rejected this subscription, this Subscription Agreement, all agreements of
the undersigned hereunder shall automatically be canceled, terminated and
revoked.
8. Notices. All notices or other communications given or made hereunder
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shall be in writing and shall be delivered or mailed by registered or certified
mail, return receipt requested, postage prepaid, to the undersigned or to the
Company at the respective addresses set forth herein.
9. Miscellaneous.
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(a) The undersigned agrees not to transfer or assign this
Subscription Agreement, or any of the undersigned's interest herein, and further
agrees that the transfer or assignment of the shares of the Preferred stock
acquired pursuant hereto shall be made only in accordance with all applicable
laws.
(b) The undersigned agrees that the undersigned may not cancel,
terminate, or revoke this Subscription Agreement or any agreement of the
undersigned made hereunder and that this Subscription Agreement shall survive
the death or disability of the undersigned and shall be binding upon the
undersigned's heirs, executors, administrators, successors, and assigns.
(c) Notwithstanding any of the representations, warranties,
acknowledgments, or agreements made herein by the undersigned, the undersigned
does not thereby or in any other manner waive any rights granted to the
undersigned under United States federal, state or foreign securities laws.
(d) Words of any gender used in this Subscription Agreement shall be
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Subscription Agreement shall
be understood and construed to apply whether the party referred to is an
individual, partnership, joint venture, corporation or an individual or
individuals doing business under a firm or trade name, and the masculine,
feminine and neuter pronouns shall each include the other and may be used
interchangeably with the same meaning.
(e) This Subscription Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.
(f) Within 10 days after receipt of a written request from the
Company, the undersigned agrees to provide such information and to execute and
deliver such documents as reasonably may be necessary to comply with any and all
laws and ordinances to which the Company is subject.
IN WITNESS WHEREOF, I have executed this Subscription Agreement as of the
___ day of ____________, 2005.
TYPE OF OWNERSHIP
(Check One)
_____ Individual (one signature required)
_____ Joint Tenants with Right of Survivorship (both parties must sign)
_____ Tenants in Preferred (both parties must sign)
_____ Community Property (one signature required if interest held in one
name, i.e., managing spouse, two signatures required if interest held
in both names).
_____ Trust
_____ Corporation
_____ Partnership
________________________________________________________________________________
Please print here the exact name (registration) investor desires for the shares.
SIGNATURE PAGE
FOR INDIVIDUAL INVESTOR
________________________________________
Signature
________________________________________
Print or Type Name
Residence Address:
________________________________________
________________________________________
Mailing Address:
________________________________________
________________________________________
Executed at _______________________, this _____ day of _____________, 2005.
SIGNATURE PAGE
FOR CORPORATE OR PARTNERSHIP INVESTOR
Name of Corporation or Partnership (Please Print or Type)
By_______________________________________________________________
Signature of Authorized Agent
Title: _________________________________________________________
Address of Principal Offices: _______________________________
_________________________________________________________________
_________________________________________________________________
Mailing Address, if Different: ______________________________
_________________________________________________________________
_________________________________________________________________
Attention: _____________________________________________________
Executed at _______________________, this _____ day of _____________, 2005.
SIGNATURE PAGE
FOR TRUST INVESTOR
Name of Trust (Please Print or Type)
_________________________________________________________________
Name of Trustee (Please Print or Type)
By_______________________________________________________________
Trustee's Signature
Date Trust was Formed:________________________________________
Trustee's Address: ____________________________________________
_________________________________________________________________
_________________________________________________________________
Attention: _____________________________________________________
Executed at _______________________, this _____ day of _____________, 2005.
SUBSCRIPTION ACCEPTED:
PALOMAR ENTERPRISES, INC.
By_____________________________________________________
Xxxxxx Bonnberger, President and Chief Executive Officer
Date: ___________________, 2005.
