SUBSCRIPTION AGENT AGREEMENT
Date:
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Mellon Bank, N.A.
00 Xxxxxxxxxx Xx.
Xxxxxxxxxx Xxxx, XX 00000
Attn: Reorganization Department
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Ladies and Gentlemen:
INSpire Insurance Solutions, a Texas corporation (the "Company") will issue
(the "Subscription Offer") to the holders of record of its outstanding shares of
Common Stock par value $0.01 per share (the "Common Stock"), at the close of
business on December 3, 2001 (the "Record Date"), the right to subscribe for and
purchase (each a "Right") shares of Common Stock (the "Additional Common Stock")
at a purchase price of $.40 per share of Additional Common Stock (the
"Subscription Price"). The term "Subscribed" shall mean submitted for purchase
from the Company by a shareholder in accordance with the terms of the
Subscription Offer, and the term "Subscription" shall mean any such submission.
The Subscription Offer will expire at 5:00 p.m., New York City Time, on January
9 (the "Expiration Time"), unless the Company shall have extended the period of
time for which the Subscription Offer is open, in which event the term
"Expiration Time" shall mean the latest time and date at which the Subscription
Offer, as so extended by the Company from time to time, shall expire.
The Company filed a Registration Statement relating to the Additional
Common Stock with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, on October 11, 2001. Said Registration Statement was
declared effective on November __, 2001. The terms of the Additional Common
Stock are more fully described in the Prospectus forming part of the
Registration Statement as it was declared effective, and the accompanying Letter
of Instruction. Copies of the Prospectus, the Letter of Instruction, the Notice
of Guaranteed Delivery, the Letter to Shareholders, the Letter to Brokers, the
Letter to Clients of Nominee Holders, the Beneficial Owner Election Form and the
Nominee Holder Certification are annexed hereto as Exhibits 1 through 8,
respectively. All terms used and not defined herein shall have the same meaning
as in the Prospectus. Promptly after the Record Date, the Company will provide
you with a list of holders of Common Stock as of the Record Date (the "Record
Shareholders List").
The Rights are evidenced by non-transferable subscription certificates (the
"Subscription Certificates"), a copy of the form of which is annexed hereto as
Exhibit 9. The Subscription Certificates entitle the holders to subscribe, upon
payment of the Subscription Price, for shares of Additional Common Stock at the
rate of one share(s) for each whole Right evidenced by a Subscription
Certificates (the "Basic Subscription Privilege"). No fractional Rights will be
issued, but the number of Rights a holder may receive will be rounded up to the
next largest whole number. The Subscription Offer includes an over-subscription
privilege entitling the holder of a Subscription Certificate, if said holder
fully exercises its Basic Subscription Privilege, to Subscribe for and pay the
Subscription Price for additional shares of Additional
Common Stock (the "Over-Subscription Privilege"). Reference is made to the
Prospectus for a complete description of the Basic Subscription Privilege and
Over-Subscription Privilege.
The Company hereby appoints you as Subscription Agent (the "Subscription
Agent") for the Subscription Offer and agrees with you as follows:
1) As Subscription Agent, you are authorized and directed to:
(A) Issue the Subscription Certificates in accordance with this Agreement
in the names of the holders of the Common Stock of record on the Record Date,
keep such records as are necessary for the purpose of recording such issuance,
and furnish a copy of such records to the Company. You shall indicate the
address of and the number of Rights issued to each such holder on the face of
the Subscription Certificate and affix such other identifying information as you
deem necessary to identify each particular shareholder upon return of the
executed Subscription Certificates.
(B) Promptly after you receive the Record Shareholders List:
(a) mail or cause to be mailed, by first class mail, to each holder of
Common Stock of record on the Record Date whose address of record is within
the United States and Canada, (i) a Subscription Certificate evidencing the
Rights to which such shareholder is entitled under the Subscription Offer,
(ii) a copy of the Prospectus, (iii) a Letter of Instruction, (iv) a Notice
of Guaranteed Delivery, (v) a Letter to Shareholders and (vi) a return
envelope addressed to the Subscription Agent; and in addition to the above
items send to securities dealers, commercial banks, trust companies and
other nominees (vii) a form letter that may be sent to their clients,
(viii) a Beneficial Owner Election Form and (ix) a Nominee Holder
Certification Form; and
(b) mail or cause to be mailed, by air mail, to each holder of Common Stock
of record on the Record Date whose address of record is outside the United
States and Canada, or is an A.P.O. or F.P.O. address (i) a copy of the
Prospectus, (ii) a Notice of Guaranteed Delivery and (iii) a Letter of
Instruction (different from the Letter of Instruction sent to shareholders
whose address of record is within the United States and Canada). You shall
refrain from mailing Subscription Certificates issuable to any holder of
Common Stock of record on the Record Date whose address of record is
outside the United States and Canada, or is an A.P.O. or F.P.O. address,
and hold such Subscription Certificates for the account of such shareholder
subject to such shareholder making satisfactory arrangements with the
Subscription Agent for the exercise or other disposition of the Rights
evidenced thereby, and follow the instructions of such shareholder for the
exercise, sale or other disposition of such Rights if such instructions are
received at or before 11:00 a.m., New York City Time, on ________________ .
(C) Accept Subscriptions upon the due exercise (including payment of the
Subscription Price) on or prior to the Expiration Time of Rights in accordance
with the terms of the Subscription Certificates and the Prospectus.
(D) Subject to the next sentence, accept Subscriptions from shareholders
whose Subscription Certificates are alleged to have been lost, stolen or
destroyed upon receipt by you of an affidavit of theft, loss or destruction and
a bond of indemnity in form and substance satisfactory to you, accompanied by
payment of the Subscription Price for the total number of shares of Additional
Common Stock Subscribed for. Upon receipt of such affidavit and bond of
indemnity and compliance with any other applicable requirements, and you shall
withhold delivery of the shares of Additional Common Stock Subscribed for until
after the Subscription
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Certificates have expired and it has been determined that the Rights evidenced
by the Certificates have not otherwise been purported to have been exercised or
otherwise surrendered.
(E) Accept Subscriptions, without further authorization or direction from
the Company, without procuring supporting legal papers or other proof of
authority to sign (including without limitation proof of appointment of a
fiduciary or other person acting in a representative capacity), and without
signatures of co-fiduciaries, co-representatives or any other person:
(a) if the Subscription Certificate is registered in the name of a
fiduciary and is executed by and the Additional Common Stock is to be
issued in the name of such fiduciary;
(b) if the Subscription Certificate is registered in the name of joint
tenants and is executed by one of the joint tenants, provided the
certificate representing the Additional Common Stock is issued in the names
of, and is to be delivered to, such joint tenants;
(c) if the Subscription Certificate is registered in the name of a
corporation and is executed by a person in a manner which appears or
purports to be done in the capacity of an officer, or agent thereof,
provided the Additional Common Stock is to be issued in the name of such
corporation; or
(d) if the Subscription Certificate is registered in the name of an
individual and is executed by a person purporting to act as such
individual's executor, administrator or personal representative, provided,
the Additional Common Stock is to be registered in the name of the
subscriber as executor or administrator of the estate of the deceased
registered holder and there is no evidence indicating the subscriber is not
the duly authorized representative that he purports to be.
(F) Accept Subscriptions not accompanied by Subscription Certificates if
submitted by a firm having membership in the New York Stock Exchange or another
national securities exchange or by a commercial bank or trust company having an
office in the United States together with the Notice of Guaranteed Delivery and
accompanied by proper payment for the total number of shares of Additional
Common Stock Subscribed for.
(G) Accept Subscriptions even though unaccompanied by Subscription
Certificates, under the circumstances and in compliance with the terms and
conditions set forth in the Prospectus under the heading "About the Rights
Offering- Guaranteed Delivery Procedures".
(H) Refer to the Company for specific instructions as to acceptance or
rejection, Subscriptions received after the Expiration Time, Subscriptions not
authorized to be accepted pursuant to this Paragraph H, and Subscriptions
otherwise failing to comply with the requirements of the Prospectus and the
terms and conditions of the Subscription Certificates.
(I) Upon acceptance of a Subscription:
(a) hold all monies received in a special account for the benefit of the
Company. Promptly following the Expiration Time you shall distribute to the
Company the funds in such account and issue certificates for shares of
Additional Common Stock issuable with respect to Subscriptions that have
been accepted.
(b) advise the Company daily by telecopy and confirm by letter to the
attention of Xxxxxxx Xxxxx (the "Company Representative"), with copies to
Xxxxxxx Xxxxx, as to the total number of shares of Additional Common Stock
Subscribed for pursuant to the Basic Subscription Privilege, the total
number of shares of Additional Common Stock
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Subscribed for pursuant to the Over-Subscription Privilege and the amount
of funds received, with cumulative totals for each; and
(c) as promptly as possible but in any event on or before 3:30 p.m., New
York City Time, on the first full business day following the Expiration
Time, advise the Company Representative in accordance with (b) above of the
total number of shares of Additional Common Stock Subscribed for pursuant
to the Basic Subscription Privilege, the number of shares of Additional
Common Stock Subscribed for pursuant to the Over-Subscription Privilege,
the number of Subscription guarantees received and the number of shares of
Additional Common Stock unsubscribed for.
(K) Upon completion of the Subscription Offer, after receiving from the
Company instructions as to how shares of Additional Common Stock subscribed for
pursuant to the Over-Subscription Privilege are to be allocated to stockholders
exercising the Over-Subscription Privilege, in accordance with the Prospectus,
you shall requisition certificates from the Transfer Agent for the Common Stock
for shares of Additional Common Stock Subscribed for.
(L) If a shareholder exercised his Over-Subscription Privilege and is
allocated less than all of the additional shares of Additional Common Stock for
which he Subscribed, you shall take such action as reasonably requested by the
Company to return the excess funds such shareholder paid for additional shares
of Additional Common Stock not allocated to him, without interest or deduction.
2) The Subscription Certificates shall be issued in registered form only
and shall be non-transferable. You shall keep books and records of the issuance
of Subscription Certificates (such books and records are hereinafter called the
"Subscription Certificate Register").
3) You will follow your regular procedures to attempt to reconcile any
discrepancies between the number of shares of Additional Common Stock that any
Subscription Certificate may indicate are to be issued to a shareholder and the
number that the Record Shareholders List indicates may be issued to such
shareholder. In any instance where you cannot reconcile such discrepancies by
following such procedures, you will consult with the Company for instructions as
to the number of shares of Additional Common Stock, if any, you are authorized
to issue. In the absence of such instructions, you are authorized not to issue
any shares of Additional Common Stock to such shareholder.
4) You will examine the Subscription Certificates received by you as
Subscription Agent to ascertain whether they appear to you to have been
completed and executed in accordance with the applicable Letter of Instruction.
In the event you determine that any Subscription Certificate does not appear to
you to have been properly completed or executed, or where the Subscription
Certificates do not appear to you to be in proper form for Subscription, or any
other irregularity in connection with the Subscription appears to you to exist,
you will follow, where possible, your regular procedures to attempt to cause
such irregularity to be corrected. You are not authorized to waive any
irregularity in connection with the Subscription, unless you shall have received
from the Company the Subscription Certificate which was delivered, duly dated
and signed by an authorized officer of the Company, indicating that any
irregularity in such Subscription Certificate has been cured or waived and that
such Subscription Certificate has been accepted by the Company. If any such
irregularity is neither corrected nor waived, you will return to the subscribing
shareholder (at your option by either first class mail under a blanket surety
bond or insurance protecting you and the Company from losses or liabilities
arising out of the non-receipt or nondelivery of Subscription Certificates or by
registered mail insured separately for the value of such Subscription
Certificates) to such
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shareholder's address as set forth in the Subscription any Subscription
Certificates surrendered in connection therewith and any other documents
received with such Subscription Certificates, and a letter of notice to be
furnished by the Company explaining the reasons for the return of the
Subscription Certificate and other documents.
5) Each document received by you relating to your duties hereunder shall be
dated and time stamped when received.
6) (a) For so long as this Agreement shall be in effect, the Company will
reserve for issuance and keep available free from preemptive rights a
sufficient number of shares of Additional Common Stock to permit the
exercise in full of all Rights issued pursuant to the Subscription
Offer. Subject to the terms and conditions of this Agreement, you will
request the Transfer Agent for the Common Stock to issue certificates
evidencing the appropriate number of shares of Additional Common Stock
as required from time to time in order to effectuate the
Subscriptions.
(b) The Company shall take any and all action, including without
limitation obtaining the authorization, consent, lack of objection,
registration or approval of any governmental authority, or the taking
of any other action under the laws of the United States of America or
any political subdivision thereof, to insure that all shares of
Additional Common Stock issuable upon the exercise of the Subscription
Certificates at the time of delivery of the certificates therefor
(subject to payment of the Subscription Price) will be duly and
validly issued and fully paid and nonassessable shares of Common
Stock, free from all preemptive rights and taxes, liens, charges and
security interests created by or imposed upon the Company with respect
thereto.
(c) The Company shall from time to time take all action necessary or
appropriate to obtain and keep effective all registrations, permits,
consents and approvals of the Securities and Exchange Commission and
any other governmental agency or authority and make such filings under
Federal and state laws which may be necessary or appropriate in
connection with the issuance, sale, transfer and delivery of
Subscription Certificates or Additional Common Stock issued upon
exercise of Subscription Certificates.
7) If certificates representing shares of Additional Common Stock are to be
delivered by you to a person other than the person in whose name a surrendered
Subscription Certificate is registered, you will issue no certificate for
Additional Common Stock until the person in whose name a surrendered
Subscription Certificate is registered has properly completed the instructions
contained in the Subscription Certificate for such delivery, and has paid any
transfer or other taxes or governmental charges required by reason of the
issuance of a certificate for Additional Common Stock in a name other than that
of the registered holder of the Subscription Certificate surrendered, or has
established to your satisfaction that any such tax or charge either has been
paid or is not payable.
8) Should any issue arise regarding federal income tax reporting or
withholding, you will take such action as the Company instructs you in writing.
9) The Company may terminate this Agreement at any time by so notifying you
in writing. You may terminate this Agreement upon 60 days' prior notice to the
Company. Upon any such termination, you shall be relieved and discharged of any
further responsibilities with respect to your duties hereunder. Upon payment of
all your outstanding fees and expenses, you will forward to the Company or its
designee promptly any Subscription Certificate or other document relating to
your duties hereunder that you may receive after your appointment has so
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terminated. Sections 11, 12, and 14 of this Agreement shall survive any
termination of this Agreement.
10) As agent for the Company hereunder you:
(a) shall have no duties or obligations other than those specifically set
forth herein or as may subsequently be agreed to in writing by you and the
Company;
(b) shall have no obligation to request the Transfer Agent to issue any
shares of Additional Common Stock unless the Company shall have provided a
sufficient number of certificates for such Additional Common Stock;
(c) shall be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value, or genuineness of
any Subscription Certificates surrendered to you hereunder or shares of
Additional Common Stock issued in exchange therefor, and will not be
required to or be responsible for and will make no representations as to,
the validity, sufficiency, value or genuineness of the Subscription Offer;
(d) shall not be obligated to take any legal action hereunder; if, however,
you determine to take any legal action hereunder, and where the taking of
such action might, in your judgment, subject or expose you to any expense
or liability you shall not be required to act unless you shall have been
furnished with an indemnity reasonably satisfactory to you;
(e) may rely on and shall be fully authorized and protected in acting or
failing to act upon any certificate, instrument, opinion, notice, letter,
telegram, telex, facsimile transmission or other document or security
delivered to you and reasonably believed by you to be genuine and to have
been signed by the proper party or parties;
(f) shall not be liable or responsible for any recital or statement
contained in the Prospectus or any other documents relating thereto;
(g) shall not be liable or responsible for any failure on the part of the
Company to comply with any of its covenants and obligations relating to the
Subscription Offer, including without limitation obligations under
applicable securities laws;
(h) may rely on and shall be fully authorized and protected in acting or
failing to act upon the written, telephonic or oral instructions with
respect to any matter relating to you acting as Subscription Agent covered
by this Agreement (or supplementing or qualifying any such actions) of
officers of the Company;
(i) may consult with counsel satisfactory to you (including your in-house
counsel) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered, or
omitted by you hereunder in good faith and in accordance with the advice of
such counsel;
(j) may perform any of your duties hereunder either directly or by or
through agents or attorneys and you shall not be liable or responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with reasonable care by you hereunder; and
(k) are not authorized, and shall have no obligation, to pay any brokers,
dealers, or soliciting fees to any person.
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11) In the event any question or dispute arises with respect to the proper
interpretation of the Subscription Offer or your duties hereunder or the rights
of the Company or of any shareholders surrendering Subscription Certificates
pursuant to the Subscription Offer, you shall not be required to act and shall
not be held liable or responsible for your refusal to act until the question or
dispute has been judicially settled (and, if appropriate, you may file a suit in
interpleader or for a declaratory judgment for such purpose) by final judgment
rendered by a court of competent jurisdiction, binding on all parties interested
in the matter which is no longer subject to review or appeal, or settled by a
written document in form and substance satisfactory to you and executed by the
Company and each such shareholder and party. In addition, you may require for
such purpose, but shall not be obligated to require, the execution of such
written settlement by all the shareholders and all other parties that may have
an interest in the settlement.
12) Any instructions given to you orally, as permitted by any provision of
this Agreement, shall be confirmed in writing by the Company as soon as
practicable. You shall not be liable or responsible and shall be fully
authorized and protected for acting, or failing to act, in accordance with any
oral instructions which do not conform with the written confirmation received in
accordance with this Section.
13) Whether or not any Subscription Certificates are surrendered to you,
for your services as Subscription Agent hereunder, the Company shall pay to you
compensation in accordance with the fee schedule attached as Exhibit A hereto,
together with reimbursement for out-of-pocket expenses, including reasonable
fees and disbursements of counsel.
14) The Company covenants to indemnify and hold you harmless from and
against any loss, liability, claim or expense ("Loss") arising out of or in
connection with your duties under this Agreement, including the costs and
expenses of defending yourself against any Loss, unless such Loss shall have
been determined by a court of competent jurisdiction to be a result of your
gross negligence or intentional misconduct. Anything in this agreement to the
contrary notwithstanding, in no event shall you be liable for special, indirect,
incidental or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if you have been advised of the likelihood of
such damages and regardless of the form of action. Any liability of yours will
be limited to the amount of fees paid by the Company hereunder. In no case shall
the Company be liable under this indemnity with respect to any action,
proceeding, suit or claim against you unless the Company shall be notified by
you, by letter or by telex or facsimile transmission confirmed by letter, of the
written assertion of any action, proceeding, suit or claim made or commenced
against you promptly after you shall have been served with the summons or other
first legal process or have received the first written assertion giving
information as to the nature and basis of the action, proceeding, suit or claim,
but failure so to notify the Company shall not release the Company of any
liability which it may have under this indemnity or otherwise hereunder except
to the extent that the Company has been materially prejudiced by such failure.
The Company shall be entitled to participate at its own expense in the defense
of any such action, proceeding, suit or claim. You agree not to settle any claim
or litigation in connection with any such claim or liability with respect to
which you may seek indemnification from the Company without the prior written
consent of the Company.
The obligations of Company under this section shall survive the termination
of this Agreement.
15) If any provision of this Agreement shall be held illegal, invalid, or
unenforceable by any court, this Agreement shall be construed and enforced as if
such provision had not been contained herein and shall be deemed an Agreement
among us to the full extent permitted by applicable law.
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16) The Company represents and warrants that (a) it is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, (b) the making and consummation of the Subscription Offer and the
execution, delivery and performance of all transactions contemplated thereby
(including without limitation this Agreement) have been duly authorized by all
necessary corporate action and will not result in a breach of or constitute a
default under the articles of incorporation or bylaws of the Company or any
indenture, agreement or instrument to which it is a party or is bound, (c) this
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid, binding and enforceable obligation of it, (d) the Subscription
Offer will comply in all material respects with all applicable requirements of
law and (e) to the best of its knowledge, there is no litigation pending or
threatened as of the date hereof in connection with the Subscription Offer.
17) In the event that any claim of inconsistency between this Agreement and
the terms of the Subscription Offer arise, as they may from time to time be
amended, the terms of the Subscription Offer shall control, except with respect
to the duties, liabilities and rights, including compensation and
indemnification of you as Subscription Agent, which shall be controlled by the
terms of this Agreement.
18) Set forth in Exhibit B hereto is a list of the names and specimen
signatures of the persons authorized to act for the Company under this
Agreement. The Secretary or any other authorized officer of the Company shall,
from time to time, certify to you the names and signatures of any other persons
authorized to act for the Company under this Agreement.
19) Except as expressly set forth elsewhere in this Agreement, all notices,
instructions and communications under this Agreement shall be in writing, shall
be effective upon receipt and shall be addressed, if to the Company, to its
address set forth beneath its signature to this Agreement, or, if to the
Subscription Agent, to Mellon Bank, N.A., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Reorganization Department, or to such other address as a
party hereto shall notify the other parties.
20) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to conflict of laws
rules or principles, and shall inure to the benefit of and be binding upon the
successors and assigns of the parties hereto; provided that this Agreement may
not be assigned by any party without the prior written consent of all other
parties.
21) No provision of this Agreement may be amended, modified or waived,
except in a written document signed by both parties.
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Please acknowledge receipt of this letter and confirm your agreement
concerning your appointment as Subscription Agent, and the arrangements herein
provided, by signing and returning the enclosed copy hereof, whereupon this
Agreement and your acceptance of the terms and conditions herein provided shall
constitute a binding Agreement between us.
Very truly yours,
INSpire Insurance Solutions, Inc.
By:
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Name: Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
Address for notices:
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000-0000
Accepted as of the date
above first written:
MELLON BANK, N.A.
AS SUBSCRIPTION AGENT
By:
---------------------------
Name:
Title:
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Exhibit 1 Prospectus
Exhibit 2 Letter of Instruction
Exhibit 3 Notice of Guaranteed Delivery
Exhibit 4 Letter to Shareholders
Exhibit 5 Letter to Brokers
Exhibit 6 Letter to Clients of Nominee Holders
Exhibit 7 Beneficial Owner Election Form
Exhibit 8 Nominee Holder Certification
Exhibit 9 Form of Subscription Certificate
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EXHIBIT A
MELLON BANK, N.A.
Schedule of Fees as Subscription Agent
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I. Set Up and Administrative Fee $7,500.00
II. Processing Basic subscriptions, each $14.00
III. Transferring subscription certificates, split-ups, reissuing new
certificates, round-ups, each $10.00
IV. Issuing subscription certificates to record date holders, each
and follow-up mailings $5.00
V. Processing oversubscriptions, including proration and refunds, each $10.00
VI. Subscriptions requiring additional handling (window items,
defective presentations, correspondence items, legal items,
and items not providing a taxpayer identification number), each $10.00
VII. Processing Guarantee of Delivery items, each $10.00
VIII. Handling Soliciting Dealer payments, each By Appraisal
IX. Special Services By Appraisal
X. Out-of-pocket Expenses (including but not limited to
postage, stationary, telephones, overnight couriers,
messengers, overtime, dinners, transportation, shipping
and trucking, mailing costs) Additional
XI. Minimum Fee $25,000.00
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EXHIBIT B
[Company Letterhead]
Name Position Specimen Signatures
---- -------- -------------------
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