HEALTHMARKETS, INC. FORM OF SUBSCRIPTION AGREEMENT
Exhibit 10.4
FORM OF SUBSCRIPTION AGREEMENT
Ladies and Gentlemen:
1. Subscription for Class A-1 Common Stock. The undersigned subscriber (the
“Subscriber”) hereby irrevocably tenders this Subscription Agreement (this
“Agreement”) to HealthMarkets, Inc., a Delaware corporation (the “Company”),
subscribes for and offers to purchase and acquire [_____] shares of Class A-1 Common Stock, par value
$0.01 per share, of the Company and agrees to pay therefor, and in full payment thereof, $[_____] per
share, in cash, in the aggregate amount of $[_____] (the “Subscription Price”). In
accordance with the terms of this Agreement, the Subscriber shall make payment of the Subscription
Price by check or wire transfer as directed by the Company. Simultaneously with the foregoing, the
Company will instruct Mellon Investor Services to credit a book entry account in the Subscriber’s
name to evidence the number of shares of Class A-1 Common Stock purchased by the Subscriber.
2. Subscriber Representations and Warranties. The Subscriber hereby represents,
warrants acknowledges and agrees as follows:
(a) Authorization. The Subscriber has full power and authority to execute,
deliver and perform this Agreement and to acquire the Class A-1 Common Stock. This
Agreement constitutes a valid and binding obligation of the Subscriber, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws of general application affecting enforcement of creditors’
rights generally.
(b) Purchase for Own Account. The Class A-1 Common Stock will be acquired for
investment only and solely for the Subscriber’s own account, and not as a nominee or agent
for any other person, and not with a view to the public resale or distribution thereof
within the meaning of the Securities Act of 1933, as amended (the “Securities Act”),
and the Subscriber has no present intention of selling, granting any participation in, or
otherwise distributing the same.
(c) Disclosure of Information. The Subscriber has had the opportunity to
review all documents and information which the Subscriber has requested concerning its
investment and the Company. The Subscriber has had the opportunity to ask questions of and
receive answers regarding the Company’s business, management and financial affairs and the
terms and conditions of the Class A-1 Common Stock.
(d) Investment Experience; Ability to Bear Economic Risk. The Subscriber (i)
understands that the purchase of the Class A-1 Common Stock involves substantial risk, (ii)
has adequate means of providing for his current needs and possible contingencies, (iii) has
no need for liquidity in his investment in the Company, and (iv)
can bear the economic risk of losing his entire investment in the Company. The
Subscriber has a preexisting personal or business relationship with the Company and/or
certain of its officers, directors or controlling persons of a nature and duration that
enables the Subscriber to be aware of the character, business acumen and financial
circumstances of the Company and such persons.
(e) Independent Investment Decision. The Subscriber acknowledges that he has,
independently and without reliance upon the Company or any other person, and based on such
information as the Subscriber has deemed appropriate, made his own investment analysis and
decision to enter into this Agreement. No representations or warranties, oral or otherwise,
have been made to the Subscriber or any party acting on the Subscriber’s behalf other than
those contained in this Agreement.
(f) Restricted Securities. The Subscriber understands that the Class A-1
Common Stock will not be registered under the Securities Act and that, as such, the Class
A-1 Common Stock may be resold without registration under the Securities Act, or pursuant to
an exemption from, or in a transaction not subject to, the registration requirements of the
Securities Act.
(g) United States Person. The Subscriber is a “United States Person” within
the meaning of Section 7701(a)(30) of the Internal Revenue Code.
3. Company Representations and Warranties. The Company hereby represents, warrants
acknowledges and agrees as follows:
(a) Authorization of Class A-1 Common Stock. The shares of Class A-1 Common
Stock issued in connection with this Agreement are duly authorized and, when issued and
delivered in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable, free and clear of any lien, security interest or other charge or encumbrance
of any kind (collectively, “Liens”) or pre-emptive right.
(b) Authorization; No Conflicts. The Company is a Delaware corporation and has
all necessary corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to issue and deliver to the Subscriber the shares of Class A-1
Common Stock. This Agreement constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws of general application affecting
enforcement of creditors’ rights generally. The execution and delivery of this Agreement
and the issuance of the shares of Class A-1 Common Stock will not (i) require any consent or
approval of, or filing with, any governmental body, agency or official or of any other third
party, (ii) violate, conflict with or cause a breach or a default under the Company’s
certificate of incorporation or by-laws or any agreement to which the Company is a party,
and (iii) violate any judgment, injunction, order, decree, statute, rule or regulation
applicable to the Company.
-2-
(c) Stockholders Agreement. Reference is hereby made to (i) that certain
Stockholders Agreement (the “Stockholders Agreement”), dated as of April 5, 2006, by
and among the Company and the Stockholders (as defined therein), and that certain
Employment Agreement (the “Employment Agreement”), dated as of the date hereof, by
and among the Company, the Subscriber and Blackstone Management Associates IV L.L.C. The
Company hereby acknowledges that, pursuant to the Employment Agreement, the Subscriber has
agreed to become a party to the Stockholders Agreement (as amended by the Employment
Agreement) and that the Employment Agreement shall act as a joinder for all purposes under
the Stockholders Agreement.
4. Notices. All notices delivered hereunder shall be in writing and shall be deemed
to have been given when hand delivered, when received if sent by facsimile or by same day or
overnight recognized commercial courier service or three days after mailed by registered or
certified mail, addressed to the address set forth on the signature page for the party to which
notice is given, or to such changed address(es) as such party may have fixed by notice, provided
however, that any notice of change of address shall be effective only upon receipt.
5. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to the principles of conflict of
laws of that State.
6. Further Assurances. The Subscriber will provide the Company with such documents
supporting the representations of the Subscriber in this Agreement as the Company may reasonably
request.
7. Amendment. Neither this Agreement nor any provisions hereof shall be modified,
discharged or terminated except by an instrument in writing signed by the Company and the
Subscriber.
8. Severability. Whenever possible, each provision or portion of any provision of
this Agreement will be interpreted in such manner as to be effective and valid under applicable law
but if any provision or portion of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as
if such invalid, illegal or unenforceable provision or portion of any provision had never been
contained herein.
9. Successors and Assigns. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
-3-
10. Entire Agreement. This Agreement and the other agreements or documents referred
to herein (including, without limitation, Sections 4(d), 8 and 9(d) of the Employment Agreement)
contain the entire agreement of the parties, and there are no representations,
warranties, covenants or other agreements except as stated or referred to herein and in such
other agreements or documents.
11. Expenses. Except as set forth in the Employment Agreement, each party hereto
shall pay its own costs and expenses in connection with the transactions contemplated hereby.
[Signatures Appear on the Next Page]
-4-
The Subscriber has executed or caused this Agreement to be duly executed this
_____
day of September,
2010.
Number of Shares Subscribed For: [_____]
Amount Tendered Herewith [x Price Per Share of $ $[____]] $[______]
| Subscriber: | ||||||
| Name: | ||||||
| Address: | ||||||
| [INSERT ADDRESS] | ||||||
| [INSERT ADDRESS] |
Accepted on this
_____
day of September, 2010.
By: |
||||
| Title: |
Wire Transfer Instructions:
JPMorgan Chase
ABA# 000000000
Account Name: HealthMarkets, Inc
Account#: 713444768
Address: NRH, TX
ABA# 000000000
Account Name: HealthMarkets, Inc
Account#: 713444768
Address: NRH, TX
-5-
