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EXHIBIT 99.4
REGISTRATION RIGHTS AGREEMENT
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TABLE OF CONTENTS
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1. INTRODUCTION.........................................................................1
2. REGISTRATION UNDER SECURITIES ACT....................................................1
2.1 Shelf Registration............................................................1
(a) Registration...........................................................1
(b) Shares Eligible for Sale...............................................1
(c) Notice of Sale.........................................................1
(d) Expenses...............................................................2
(e) No Underwriters........................................................2
2.2 Request for Underwritten Offering.............................................2
(a) Request................................................................2
(b) Selection of Underwriters..............................................2
2.3 Registration Procedures.......................................................2
(a) Procedures.............................................................2
(b) Information Concerning Distribution....................................5
(c) Other Registration Rights..............................................5
(d) Suspension of Effectiveness of Registration Statement..................5
2.4 Indemnification and Contribution..............................................5
(a) Indemnification by PacifiCare..........................................5
(b) Indemnification by UniHealth...........................................6
(c) Notices of Claims, etc.................................................7
(d) Contribution...........................................................7
(e) Other Indemnification and Contribution.................................8
(f) Payments...............................................................8
3. GENERAL..............................................................................8
3.1 Amendments and Waivers........................................................8
3.2 Notices.......................................................................8
3.3 Certain Definitions...........................................................9
3.4 Miscellaneous................................................................10
3.5 Arbitration..................................................................10
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TABLE OF CONTENTS
(CONTINUED)
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3.6 Attorneys' Fees..............................................................11
ii.
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into as
of May 4, 1999 by and between PACIFICARE HEALTH SYSTEMS, INC., a Delaware
corporation ("PacifiCare"), and UNIHEALTH FOUNDATION, a California nonprofit
public benefit corporation ("UniHealth").
1. INTRODUCTION. UniHealth and PacifiCare have entered into a Stock Purchase
Agreement dated as of the date hereof (the "Stock Purchase Agreement") providing
for the repurchase by PacifiCare of up to an aggregate of 5,909,500 shares of
common stock of PacifiCare held by UniHealth (the "UniHealth Shares") on the
terms and conditions set forth therein. In connection with the execution of the
Stock Purchase Agreement, PacifiCare has agreed to (i) file a shelf registration
statement to enable UniHealth to sell any UniHealth Shares which may be released
from PacifiCare's repurchase obligation pursuant to the terms set forth in
Sections 8.5 and 9.2 of the Stock Purchase Agreement (the "Released Shares") and
any of the 285,000 shares of Class B Common Stock owned by UniHealth and the
shares of PacifiCare Common Stock to be exchanged for such shares of Class B
Common Stock following the Approval ("Class B Shares"), and (ii) reasonably
cooperate with UniHealth if UniHealth desires to sell any Released Shares or
Class B Shares it continues to own after February 15, 2001 (the "Remaining
Released Shares") through an underwritten offering. For purposes of this
Agreement, each of UniHealth Shares, Released Shares, Class B Shares and
Remaining Released Shares shall include any shares of Common Stock issued as a
dividend or other distribution with respect to, in exchange for or in
replacement of, such UniHealth Shares, Released Shares, Class B Shares and
Remaining Released Shares, as applicable. Certain capitalized terms used in this
Agreement are defined in Section 3.3.
2. REGISTRATION UNDER SECURITIES ACT.
2.1 SHELF REGISTRATION.
(a) REGISTRATION. Within thirty (30) days following the date of
the Approval, PacifiCare shall prepare and file with the Securities and Exchange
Commission a shelf registration statement on Form S-3 (or any successor form
thereto) with respect to the resale of UniHealth Shares that are not purchased
by PacifiCare at the Initial Closing and the Class B Shares (including or
incorporating by reference such audited financial statements as may be required
by the Securities Act or the rules and regulations promulgated thereunder) (the
"Shelf Registration Statement") and use its reasonable efforts to cause the
Shelf Registration Statement to become and remain effective.
(b) SHARES ELIGIBLE FOR SALE. The shares eligible for sale under
the registration pursuant to this Section 2.1 shall be limited to the Released
Shares.
(c) NOTICE OF SALE. UniHealth shall provide PacifiCare with
written notice of any proposed sales to be made under the Shelf Registration
Statement pursuant to this Section 2.1 (the "Notice") at least ten (10) days
prior to any such proposed sale. The Notice shall
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describe the nature of the shares proposed to be sold in sufficient detail to
establish that such shares are Released Shares.
(d) EXPENSES. PacifiCare will pay all Authorized Registration
Expenses in connection with the registration pursuant to this Section 2.1,
including the Underwritten Offering pursuant to Section 2.2. UniHealth will pay
all Excluded Registration Expenses in connection with the registration pursuant
to this Section 2.1.
(e) NO UNDERWRITERS. Until the Final Closing under the Stock
Purchase Agreement, UniHealth will not retain an underwriter in connection with
any proposed sale under the Shelf Registration Statement.
2.2 REQUEST FOR UNDERWRITTEN OFFERING.
(a) REQUEST. Subject to the conditions of this Section 2.2 and
the other terms and conditions of this Agreement, during the one year period
commencing on February 15, 2001, and ending on February 14, 2002, upon the
written request of UniHealth for an underwritten offering under the Shelf
Registration Statement for all Remaining Released Shares ("Underwritten
Offering"), PacifiCare shall reasonably cooperate in one Underwritten Offering,
provided that PacifiCare shall not be obligated to maintain the effectiveness of
any prospectus for the Underwritten Offering for more than ninety (90) days, and
provided further that PacifiCare shall have no obligation to participate in an
Underwritten Offering if the market value of the Remaining Released Shares if
less than $25,000,000.
(b) SELECTION OF UNDERWRITERS. If UniHealth elects an
Underwritten Offering pursuant to Section 2.2(a), UniHealth shall select and
obtain the investment banker or investment bankers and manager or managers that
will administer the offering, provided that such selection shall be subject to
PacifiCare's approval, which approval shall not unreasonably be withheld.
2.3 REGISTRATION PROCEDURES.
(a) PROCEDURES. If and whenever PacifiCare is required by the
provisions of this Agreement to use all reasonable efforts to effect or cause
the registration of any Released Shares or Class B Shares (including the
Remaining Released Shares) under the Securities Act or the sale of any Released
Shares or Class B Shares registered on the Shelf Registration Statement as
provided in this Agreement, PacifiCare shall, as expeditiously as possible:
(i) prepare and file with the Securities and Exchange
Commission the Shelf Registration Statement on Form S-3 (or any successor form
thereto) with respect to resale on a continuous basis of such Released Shares or
Class B Shares (including or incorporating by reference such audited financial
statements as may be required by the Securities Act or the rules and regulations
promulgated thereunder in order to maintain its effectiveness) and use its
reasonable efforts to cause such registration statement to become and remain
effective, provided that before filing such registration statement or any
amendment or supplement thereto, PacifiCare will furnish to the counsel selected
by UniHealth copies of all such documents proposed to be filed for review and
comment;
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(ii) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to maintain the
effectiveness of the Shelf Registration Statement and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until (i) if no Underwritten
Offering is requested under Section 2.2(a), on February 14, 2002, and (ii) if
UniHealth elects an Underwritten Offering, until the earlier to occur of the
completion of the offering pursuant to such prospectus and the expiration of
ninety (90) days after the final prospectus for the Underwritten Offering
becomes effective;
(iii) furnish to UniHealth and each underwriter, if any,
such number of copies of such registration statement and of each such amendment
and supplement thereto (in each case including all exhibits), such number of
copies of the prospectus and supplements thereto included in such registration
statement (including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as UniHealth or any underwriter, if any, may reasonably request in
order to facilitate the public sale or other disposition of the Released Shares
or Class B Shares;
(iv) use all reasonable efforts to register or qualify all
UniHealth Shares and Class B Shares covered by such registration statement under
such other state securities laws or blue sky laws of such United States
jurisdictions as UniHealth or any underwriter, if any, shall reasonably request,
to keep such registrations or qualifications in effect for so long as the
registration statement filed under the Securities Act remains in effect and to
do any and all other acts and things which may be reasonably necessary or
advisable to enable UniHealth and such underwriter, if any, to consummate the
disposition in such jurisdictions of such Released Shares or Class B Shares,
provided, however, that PacifiCare shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this clause (iv) be obligated
to be qualified, to subject itself to taxation in any such jurisdiction or to
consent to general service of process in any such jurisdiction;
(v) notify UniHealth, at any time when a prospectus
relating to the UniHealth Shares and Class B Shares is required to be delivered
under the Securities Act, of PacifiCare's becoming aware that the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and promptly prepare and furnish to
UniHealth and each underwriter, if any, a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such Released Shares or Class B Shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(vi) advise UniHealth, promptly after it receives notice
thereof, of the time when such registration statement or any amendment thereto
has become effective or any related prospectus or any supplement to such
prospectus or any amendment to such prospectus has been filed, of the issuance
by the Securities and Exchange Commission of any stop order or
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of any order preventing or suspending the use of any related preliminary
prospectus or prospectus, of the suspension of the qualification of such
Released Shares or Class B Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of any
request by the Securities and Exchange Commission for the amending or
supplementing of such registration statement or prospectus or for additional
information; and in the event of the issuance of any stop order or of any order
preventing or suspending the use of any such preliminary prospectus or
prospectus or suspending any such qualification, to use promptly all reasonable
efforts to obtain withdrawal of such order;
(vii) file promptly all documents required to be filed
with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d)
of the Exchange Act subsequent to the time such registration statement becomes
effective and during any period when any related prospectus is required to be
delivered;
(viii) otherwise use all reasonable efforts to comply with
all applicable provisions of the Securities Act and all applicable rules and
regulations of the Securities and Exchange Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement which
shall satisfy the provisions of Section 11(a) of the Securities Act;
(ix) in connection with the Underwritten Offering pursuant
to Section 2.2 hereof, furnish, at the request of UniHealth on the date such
securities are delivered to the underwriters for sale pursuant to such
registration (i) an opinion, dated such date, of counsel representing PacifiCare
for purposes of such registration, addressed to the underwriters, covering such
legal matters with respect to such registration as UniHealth may reasonably
request and are customarily included in such an opinion, and (ii) letters, dated
the effective date of the amendment to the registration statement containing the
prospectus for the Underwritten Offering and the date such securities are
delivered to the underwriters for sale pursuant to such registration, from the
independent certified public accountants of PacifiCare, addressed to the
underwriters and to UniHealth covering such financial, statistical and
accounting matters with respect to such registration as UniHealth may reasonably
request and are customarily included in such letters; and
(x) in connection with the Underwritten Offering pursuant
to Section 2.2 hereof, at the request of UniHealth, cause its executive officers
to reasonably participate in a roadshow for the Underwritten Offering; provided
that the roadshow is scheduled, with the reasonable prior consent of PacifiCare,
so as not to disrupt the normal business operations and existing scheduled
events of PacifiCare or its affected executive officers.
Upon receipt of any notice from PacifiCare of the occurrence of any event of the
kind described in clause (vi) of this Section 2.3(a), UniHealth will forthwith
discontinue UniHealth's disposition of Released Shares or Class B Shares
pursuant to the registration statement covering such Released Shares or Class B
Shares until UniHealth's receipt of the copies of the supplemented or amended
prospectus contemplated by clause (vi) of this Section 2.3(a) and, if so
directed by PacifiCare, will deliver to PacifiCare all copies, other than
permanent file copies, then in UniHealth's possession of the prospectus covering
such Released Shares or Class B Shares current at the time of receipt of such
notice. In the event Pacificare shall give any such notice,
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the period mentioned in clause (ii) of this Section 2.3(a) shall be extended by
the length of the period from and including the date when PacifiCare shall have
given such notice to and including the date when UniHealth shall have received
the copies of the supplemented or amended prospectus contemplated by clause (vi)
of this Section 2.3(a).
(b) INFORMATION CONCERNING DISTRIBUTION. As a condition to filing
or effecting the Shelf Registration Statement pursuant to Section 2.1 or
amending the Shelf Registration Statement for an Underwritten Offering,
PacifiCare may require UniHealth to furnish PacifiCare such information
regarding UniHealth and the distribution of such securities as PacifiCare may
reasonably request in writing for inclusion in the registration statement in
accordance with the rules and regulations of the Securities and Exchange
Commission or in connection with any registration, qualification, compliance or
filing for an exemption under state securities laws.
(c) OTHER REGISTRATION RIGHTS. PacifiCare represents and warrants
to UniHealth that, as of the date of this Agreement, it has not agreed to
register any securities of PacifiCare under the Securities Act or the laws of
any other jurisdiction pursuant to registration rights which conflict with those
granted pursuant to this Agreement.
(d) SUSPENSION OF EFFECTIVENESS OF REGISTRATION STATEMENT.
Notwithstanding any other provision of this Agreement, following the
effectiveness of the Shelf Registration Statement hereunder, PacifiCare may, at
any time, suspend the effectiveness of the registration statement for up to no
longer forty-five (45) days, as appropriate (a "Suspension Period"), by giving
notice to UniHealth that in the good faith judgment of the Board of Directors of
PacifiCare, it would be seriously detrimental to PacifiCare and its stockholders
to disclose any previously undisclosed material corporate development that would
be required to be disclosed if the registration statement is not suspended.
PacifiCare will use its best efforts to minimize the length of any Suspension
Period. UniHealth agrees that, upon receipt of any notice from PacifiCare of a
Suspension Period, UniHealth will not sell any Released Shares or Class B Shares
until (i) UniHealth is advised in writing by PacifiCare that the use of the
applicable prospectus may be resumed, (ii) UniHealth has received copies of any
additional supplemental or amended prospectus, if applicable, and (iii)
UniHealth has received copies of any additional or supplemental filings which
are incorporated or deemed to be incorporated by reference in such prospectus.
2.4 INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY PACIFICARE. With respect to the Shelf
Registration Statement and any amendment or supplement thereto, to the extent
permitted by law, PacifiCare will indemnify and hold harmless UniHealth, its
directors, officers, employees and agents, each other Person who participates as
an underwriter in the offering or sale of such Released Shares or Class B Shares
and each other Person, if any, who controls UniHealth or any such underwriter
within the meaning of the Securities Act or the Exchange Act, against any
losses, claims, damages or liabilities (whether arising out of a claim of a
party hereto, a third party or otherwise), to which UniHealth or any such
director or officer or underwriter or controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings, whether commenced or
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threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Shelf Registration Statement, any preliminary prospectus, final prospectus,
summary prospectus, notification or offering circular contained therein or
otherwise used or approved for use by PacifiCare in the offering pursuant
thereto, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and PacifiCare will
reimburse UniHealth and each such director, officer, employee, agent,
underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding or successfully enforcing the
provisions hereof; provided, however, that (i) PacifiCare shall not be liable in
any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, notification, offering circular, amendment
or supplement in reliance upon and in conformity with information furnished to
PacifiCare in writing by UniHealth or, if the Person seeking indemnification is
an underwriter, by such underwriters, in either case expressly for use therein,
and (ii) the provisions of this Section 2.4(a) shall not inure to the benefit of
any underwriter (or any Person controlling such underwriter) on account of any
losses, claims, damages, liabilities or actions arising from the sale of
securities to any Person if such underwriter failed to send or give a copy of
the related prospectus, as the same may be then amended or supplemented, to such
Person within the time required by the Securities Act. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of UniHealth or any such director, officer, employee, agent, underwriter
or controlling person and shall survive the transfer of such securities by
UniHealth.
(b) INDEMNIFICATION BY UNIHEALTH. PacifiCare may require, as a
condition to including any Released Shares or Class B Shares in the Shelf
Registration Statement or amending the Shelf Registration Statement for the
Underwritten Offering, that PacifiCare shall have received an undertaking
satisfactory to it from UniHealth, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 2.4(a) hereof) PacifiCare,
each director of PacifiCare (or each person performing a similar function), each
officer of PacifiCare (or each person performing a similar function), each
employee and agent of PacifiCare and each other Person, if any, who controls
PacifiCare within the meaning of the Securities Act, each Person who
participates as an underwriter in the offering or sale of such Released Shares
or Class B Shares and each other Person, if any, who controls such underwriter
within the meaning of the Securities Act, with respect to any statement or
alleged statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus, summary prospectus,
notification or offering circular contained therein, or any amendment or
supplement thereto, if and to the extent such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
information furnished to PacifiCare in writing by UniHealth expressly for use
therein; provided, however, that with respect to any untrue statement or
omission or alleged untrue statement or omission made in any preliminary
prospectus, no such undertaking shall apply to the extent that any loss, claim,
damage, liability or expense results from the fact that a current copy of the
prospectus was not sent or given to the Person asserting any such loss, claim,
damage, liability or expense at or prior to the written confirmation of the sale
of the Released Shares or Class B Shares concerned to
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such Person if it is determined that it was the responsibility of PacifiCare to
provide such Person with such current copy of the prospectus and such current
copy of the prospectus would have cured the defect giving rise to such loss,
claim, damage, liability or expense; and provided, further, that the maximum
obligation of UniHealth pursuant to any such undertaking shall be limited to an
amount equal to the aggregate sales price of the Released Shares and Class B
Shares sold pursuant thereto. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of PacifiCare or any
such director, officer, employee, agent or controlling person and shall survive
the transfer of such securities by UniHealth.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.4(a) or 2.4(b) hereof, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give prompt written notice to the latter of the commencement
of such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under Section 2.4(a) or 2.4(b) hereof except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof (unless in
such indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
counsel chosen by such indemnifying party is not reasonably satisfactory to such
indemnified party or the indemnifying party does not in fact assume such
defense), the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of investigation
or enforcement. No indemnifying party shall consent to entry of any judgment or
enter into any settlement without the consent of the indemnified party (which
shall not be unreasonably withheld) if it does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a complete and unconditional release from all liability in respect of such
claim or litigation without any payment or consideration provided by such
indemnified party other than a payment or consideration as to which such
indemnified party is concurrently indemnified by an equal payment to such
indemnified party. No indemnified party shall consent to entry of any judgment
or enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying party
(which shall not be unreasonably withheld).
(d) CONTRIBUTION. If the indemnification provided for in Section
2.4(a) or 2.4(b) hereof is unavailable to a party that would have been an
indemnified party under such Section in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred to
therein, then each party that would have been an indemnifying party thereunder
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and such indemnified party on the other
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in connection with the statements or omissions or alleged statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof); provided, however, that the
liability of UniHealth shall be limited to an amount equal to the aggregate
sales price under the Shelf Registration Statement of the Released Shares and
Class B Shares. The relative fault shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or such indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. PacifiCare and
UniHealth agree that it would not be just and equitable if contribution pursuant
to this Section 2.4(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 2.4(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this Section 2.4(d) shall
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim
(which shall be limited as provided in Section 2.4(d) hereof if the indemnifying
party has assumed the defense of any such action in accordance with the
provisions thereof) and of successfully enforcing the provisions hereof. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) OTHER INDEMNIFICATION AND CONTRIBUTION. Indemnification and
contribution similar to that specified in Sections 2.4(a), 2.4(b), 2.4(c) and
2.4(d) hereof (with appropriate modifications) shall be given by PacifiCare and
UniHealth with respect to any required registration or other qualification of
such Released Shares or Class B Shares under any federal or state law or
regulation of any governmental authority, other than the Securities Act.
(f) PAYMENTS. The indemnification and contribution required by
this Section 2.4 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
3. GENERAL.
3.1 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) only with
the written consent of PacifiCare and UniHealth.
3.2 NOTICES. Any notice or other communication in connection with this
Agreement shall be deemed to be delivered if in writing (or in the form of a
telex or telecopy) addressed as hereinafter provided and if either (x) actually
delivered at said address (evidenced in the case of a telex or telecopy by
receipt of the correct answerback or other communication) or (y) in the case of
a letter, five business days shall have elapsed after the same shall have been
deposited in the mails, postage prepaid and registered or certified: (a) if to
UniHealth, at its registered address as set forth in the register kept by
PacifiCare, (b) if to PacifiCare, to the attention of the Chief Executive
Officer at 0000 Xxxx Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000, or at such
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other address as PacifiCare shall have furnished to each holder of Released
Shares or Class B Shares at the time outstanding.
3.3 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
have the following respective meanings:
"AFFILIATE" has the meaning set forth in Rule 405 under the Securities
Act.
"APPROVAL" has the meaning set forth in the Recitals to the Stock
Purchase Agreement.
"AUTHORIZED REGISTRATION EXPENSES" means all expenses incident to
PacifiCare's performance of or compliance with Section 2.1 hereof, including all
registration, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all expenses of formatting for electronic
submission to the Securities and Exchange Commission, messenger and delivery
expenses, the fees and disbursements of counsel for PacifiCare and of its
independent public accountants, provided that, in any case where any
registration expenses are not to be borne by PacifiCare, such expenses shall not
include salaries or fringe benefits of PacifiCare personnel or general overhead
expenses of PacifiCare, and shall not include premiums or other expenses
relating to liability insurance required by underwriters or PacifiCare, or other
expenses for the preparation of financial statements or other data normally
prepared by PacifiCare in the ordinary course of its business or which
PacifiCare would have incurred in any event.
"CLASS B SHARES" has the meaning set forth in Section 1 of this
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or any similar
federal statute, and the rules and regulations of the Securities and Exchange
Commission thereunder, all as the same shall be amended from time to time.
"EXCLUDED REGISTRATION EXPENSES" means all expenses, fees and
disbursements of counsel retained by UniHealth, all expenses, fees and
disbursements of any underwriters, any printing costs incurred at the election
of UniHealth, all accounting fees incurred in connection with any comfort letter
for the Underwritten Offering, if any, and all other expenses, fees and
disbursements incident to any registration either initiated or effected pursuant
to this Agreement which are not explicitly included as Authorized Registration
Expenses.
"INITIAL CLOSING" has the meaning set forth in Section 1 of the Stock
Purchase Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"PACIFICARE" has the meaning set forth in the Preamble to this
Agreement.
"PERSON" means a corporation, an association, a partnership, an
organization, a trust, a business, an individual, a government or political
subdivision thereof, a governmental agency or any other entity.
"RELEASED SHARES" has the meaning set forth in Section 1 of this
Agreement.
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"REMAINING RELEASED SHARES" has the meaning set forth in Section 1 of
this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the Securities and Exchange
Commission thereunder, all as the same shall be amended from time to time.
"SECURITIES AND EXCHANGE COMMISSION" means the U.S. Securities and
Exchange Commission, or any other federal agency at the time administering the
Exchange Act or the Securities Act, whichever is the relevant statute for the
particular purpose.
"STOCK PURCHASE AGREEMENT" has the meaning set forth in Section 1 of
this Agreement.
"UNIHEALTH" has the meaning set forth in the Preamble to this Agreement.
"UNIHEALTH SHARES" has the meaning set forth in Section 1 of this
Agreement.
3.4 MISCELLANEOUS. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the holders from time to time of Released
Shares and Class B Shares, whether so expressed or not. This Agreement embodies
the entire agreement and understanding between PacifiCare and UniHealth and
supersedes all prior agreements and understandings relating to the subject
matter hereof. This Agreement shall be construed and enforced in accordance with
and governed by the domestic substantive laws of the State of California,
without reference to any choice or conflict of laws principles which could cause
the application of the domestic substantive laws of any other jurisdiction. The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
3.5 ARBITRATION. A party asserting the existence of any dispute or
controversy arising out of or in connection with this Agreement (a "Dispute"),
including any Dispute relating to the existence, materiality or cure of a
claimed material breach, shall notify the other parties to this Agreement in
writing of the existence and subject matter of the Dispute. For a thirty (30)
day period following such notification, the parties shall meet and negotiate in
good faith to attempt the resolve the Dispute and shall escalate the Dispute to
the respective Chief Executive Officers of the parties if resolution is not made
within the first fifteen (15) days. If such efforts do not resolve the Dispute
within such thirty (30) day period, the Dispute shall be referred to and finally
resolved by arbitration under the rules of the American Arbitration Association,
and except for proceedings commenced to enforce an arbitration award, each party
hereby irrevocably waives its right to commence any proceeding in any court with
respect to any matter arising under this Agreement. The tribunal shall consist
of a sole arbitrator appointed jointly by the parties. In the case of the
parties failing to choose a sole arbitrator, the tribunal shall consist of three
arbitrators, two of whom shall be appointed by the respective parties and the
third arbitrator shall be appointed jointly by the first two. The place of
arbitration shall be Orange County, California or such other location as the
parties shall agree. The language of the arbitration shall be English. No
arbitrator shall be an Affiliate, employee, officer or director of either party
or of their respective Affiliates, nor shall any Arbitrator have any interest
that would be affected in any material respect by the outcome of the Dispute.
The decision of the sole arbitrator or of a
10.
14
majority of the arbitrators, where applicable, shall be final and binding on the
parties and their respective successors and assigns. The decision shall not be
subject to appeal or judicial review except in circumstances of fraud. The
prevailing party in any such arbitration shall be entitled to recover reasonable
fees of attorneys and other professionals in addition to all court costs and
arbitrator's fees which that party may incur as a result. Judgment upon the
award granted by the arbitrator(s) may be entered in any court having
jurisdiction over the relevant party or its assets.
3.6 ATTORNEYS' FEES. In any action at law or in equity to enforce any of
the provisions or rights under this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and expenses incurred in such
action, in addition to any other relief to which such party shall be entitled.
[THIS SPACE INTENTIONALLY LEFT BLANK]
11.
15
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed on the date first written above.
PACIFICARE HEALTH SYSTEMS, INC.,
a Delaware corporation
By: ____________________________________
Xxxx Xxxxx
Chairman of the Board & Chief
Executive Officer
UNIHEALTH FOUNDATION,
a California nonprofit public benefit
corporation
By: ____________________________________
Xxxxx X. Xxxxxxxxx
Chairman of the Board
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
