EXHIBIT 99.1
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement"), dated as of November 27, 2001
by and between the UNIHEALTH FOUNDATION (the "Seller") and AQUA WELLINGTON NORTH
AMERICAN EQUITIES FUND, LTD., a limited liability company organized under the
laws of the Commonwealth of The Bahamas (the "Buyer").
1. The Seller is the beneficial and record owner of shares of common
stock, par value $0.01 per share (the "Common Stock") of PacifiCare Health
Systems, Inc., a Delaware corporation (the "Issuer"). The Seller now wishes to
sell up to 2,139,500 shares of Common Stock (the "Shares").
2. The Buyer desires to purchase from the Seller, and the Seller desires
to sell to the Buyer, the Seller's entire right, title and interest in and to
the Shares, in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the representations, warranties and
agreements contained herein and for other good and valuable consideration, the
receipt and legal adequacy of which is hereby acknowledged, the parties agree:
1. Agreement to Purchase
The Buyer hereby agrees to purchase, and the Seller hereby agrees
to sell, its Shares pursuant to the conditions set forth herein. This agreement
shall become effective upon delivery by facsimile of executed signature pages of
this Agreement such date shall be the (the "Closing Date").
2. Representations, Warranties and Covenants of Buyer. The Buyer
represents and warrants to the Seller, and covenants for the benefit of the
Seller, as follows:
(a) This Agreement constitutes a valid and binding agreement and
obligations of the Buyer enforceable against the Buyer in accordance with its
terms, subject to limitations on the enforcement by general principles of equity
and bankruptcy or other laws affecting the enforcement of creditor's rights
generally;
(b) This Agreement has been duly authorized, validly executed and
delivered on behalf of the Buyer and is a valid and binding agreement and
obligation of the Buyer enforceable against the Buyer in accordance with its
terms, subject to limitations on enforcement by general principles of equity and
by bankruptcy or other laws affecting the enforcement of creditor's rights
generally, and the Buyer has full power and authority to execute and deliver
this Agreement and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder;
(c) The execution and delivery of this Agreement, the purchase of
the Shares and this communication of the transactions contemplated by this
Agreement by the Buyer, will not conflict with or result in a breach of or a
default under any of the terms or provisions of, the Buyers certificate of
limited liability company, or of any material provision of any indenture,
mortgage, deed of trust or other material agreement or instrument to which the
Buyer is a party or by which it or any of its material properties or assets is
bound, any material provision of any law, statute, rule, regulation, or any
existing applicable decree, judgment or order by any court, federal or state
regulatory body, administrative agency, or other governmental body having
jurisdiction over the Buyer, or any of its material properties or assets or will
result in the creation or imposition of any material lien, charge or encumbrance
upon any material property or assets of the Buyer pursuant to the terms of any
agreement or instrument to which any of the them is a party or by which any of
them be bound or to which any of their property or any of them is subject.
3. Representations, Warranties and Covenants of the Seller. The Seller
represents and warrants to the Buyer, and covenants for the benefit of the
Buyer, as follows:
(a) The offer and sale of the Shares is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(1) of the
Securities Act, as amended;
(b) To the Seller's knowledge, the Shares have been duly
authorized and validly issued and are fully paid and nonassessable;
(c) The Shares are not "restricted securities" as defined under
Rule 144(a)(3) promulgated under the Securities Act of 1933, as amended, and the
Shares have been beneficially owned by the Seller for more than two (2) years;
(d) The Seller is not an "affiliate" (as such term is defined
under Rule 144(a)(1) of the Issuer;
(e) This Agreement has been duly authorized, validly executed and
delivered on behalf of the Seller and is a valid and binding agreement and
obligation of the Seller enforceable against the Seller in accordance with its
terms, subject to limitations on enforcement by general principles of equity and
by bankruptcy or other laws affecting the enforcement of creditors' rights
generally, and the Seller has full power and authority to execute and deliver
this Agreement and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and thereunder;
(f) The execution and delivery of this Agreement, the sale of the
Shares and the consummation of the transactions contemplated by this Agreement
by the Seller, will not conflict with or result in a breach of or a default
under any of the terms or provisions of, the Seller's articles of incorporation,
by-laws or organizational documents, or of any material provision of any
indenture, mortgage, deed of trust or other material agreement or instrument to
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which the Seller is a party or by which it or any of its material properties or
assets is bound, any material provision of any law, statute, rule, regulation,
or any existing applicable decree, judgment or order by any court, federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over the Seller, or any of its material properties or assets or
will result in the creation or imposition of any material lien, charge or
encumbrance upon any material property or assets of the Seller pursuant to the
terms of any agreement or instrument to which any of them is a party or by which
any of them may be bound or to which any of their property or any of them is
subject;
(g) No authorization, approval, filing with or consent of any
governmental body is required for the sale of the Shares to the Buyer pursuant
to this Agreement;
(h) The Seller is the legal and beneficial owner of the Shares,
free and clear of any liens, charges or encumbrances. At the Closing, upon
payment of the Purchase Price, the Buyer will acquire all right, title and
interest in the Shares, free and clear of all liens, charges or encumbrances.
4. Pricing Terms. Subject to the satisfaction of the conditions set forth
in this Agreement, the parties agree as follows:
(a) The purchase price of the Shares shall be determined over a
period of thirteen (13) consecutive Trading days (the "Pricing Period");
(b) The Pricing Period will commence on November 30, 2001 but at
no time prior to the date following the escrow agents receipt of 2,139,500
Shares to be purchased for such Pricing Period.
(c) The lowest price that will be used to calculate the purchase
price of the Shares during the Pricing Period shall be $15.25 (the "Threshold
Price");
(d) During the Pricing Period, the Buyer shall be obligated to
purchase 160,000 Shares (the "Pro-Rata Shares") at the end of each Trading Day
for each Trading Day that the VWAP is at or above the Threshold Price. For each
Trading Day during the Pricing Period that the VWAP is below the Threshold
Price, the Buyer shall have the right but not the obligation until the end of
the Pricing Period to purchase up to the Pro-Rata Shares (the "Below Threshold
Shares") at the price equal to ninety-six percent (96%) of the Threshold Price.
The Pro-Rata Shares for the first Trading Day shall mean 219,500 Shares.
(e) The price per share to be paid for the Shares to be purchased
shall be determined on a daily basis during the Pricing Period. For each Trading
Day during the Pricing Period on which the VWAP is equal to or greater than the
Threshold Price, the Buyer shall purchase the Pro-Rata Shares at a price equal
to ninety-six percent (96%) of the VWAP for such Trading Day. On any Trading Day
during the Pricing Period, the Buyer may in addition choose
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to purchase up to any Below Threshold Shares at a price equal to ninety-six
(96%) of the Threshold Price.
(f) For each Trading Day, the "Daily Purchase Agreement" shall be
equal the (i) the Pro-Rata Shares, if any, multiplied by 96% of such day's VWAP
and (ii) any Below Threshold Shares, if any, multiplied by 96% of the Threshold
Price that the Buyer chooses to purchase on such Trading Day;
(g) Seller's Option to Terminate the Pricing Period. On any
Trading day, the Seller may terminate the Pricing period, such that the Seller
must deliver a notice of termination to the Buyer and Escrow Agent which receipt
shall be confirmed in writing by the Buyer, before 10:30 a.m. (New York time) on
such Trading day (the "Termination Notice"). If the Buyer fails to deliver
receipt by 10:30 a.m. then the Escrow Agent must confirm such Termination to the
Buyer and Seller before 12:00 p.m. (New York time). If the Termination notice is
received after 9:30 a.m. (New York time) on a Trading Day, such Trading day
shall be the last Trading day of the Pricing Period, unless otherwise mutually
agreed upon (the "Termination Date"). In the event the Pricing Period is
terminated, both the Buyer and the Seller shall still be obligated to settle all
purchased but unsettled Daily Purchase Amounts.
(h) Buyer's Option to Shorten the Pricing Period. On the tenth
(10th) Trading Day of the Pricing Period and any Trading Day thereafter, the
Buyer with the consent of the Seller, may deliver a written notice to the Seller
to shorten the Pricing Period such that the Pricing Period ends on the Trading
Day the notice is delivered (the "Shortening Notice"), provided that the Buyer
purchases the Remaining Shares on such Trading Day (the "Shortened Pricing
Period"). The Remaining Shares shall be equal (i) 2,139,500 Shares minus (x) all
previously settled and purchased but unsettled (i) Pro-Rata Shares and (ii)
Below Threshold Shares. Price per share of the purchase shall be equal the
Average Price, calculated by dividing (iii) all previously purchased Daily
Purchase Amounts by (iv) all previously settled and purchased but unsettled
Pro-Rata Shares and Below Threshold Shares.
(i) The Shares purchased during the Pricing Period shall be
settled on (i) the first Trading Day following each Trading Day of the Pricing
Period and (ii) the first Trading day immediately after the last Trading Day of
the Pricing Period, Shortened Pricing Period, or a Termination Date (each, a
"Settlement Date"). On each Settlement Date, the Escrow Agent shall deliver to
the Buyer the Pro-Rata Shares and any Below Threshold Shares purchased by the
Buyer on the previous Trading Day, simultaneous with the Buyer's writing of the
Daily Purchase Amount to the Escrow Agent for the Shares purchased but at no
time later then upon receipt of the Daily Purchase Amount by the Escrow Agent.
(j) For purposed of this Agreement, "VWAP" shall mean the daily
volume weighted average price (based on a Trading Day from 9:30 a.m. to 4:00
p.m., eastern time) of the Common Stock on the NASDAQ National Market or an
Alternate Market as reported by Bloomberg Financial LP using the AQR function,
and "Alternate Market" shall mean the OTC Bulletin Board, the Nasdaq Small Cap
Market, the American Stock Exchange, or the New York
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Stock Exchange, whichever is at the time the principal trading exchange or
market for the Common Stock.
(k) For the purposes of this Agreement, "Trading Day" shall mean a
day on which the Common Stock is traded on the NASDAQ National market or an
Alternate Market. If the trading in the Common Stock is suspended for any reason
for more than three (3) hours in any Trading Day or trading in securities in the
United States has been halted for any reason, at the Buyer's option, such day
shall not be deemed a Trading day.
(l) The obligation of the Buyer to purchase and the Seller to sell
the shares pursuant to this Agreement shall terminate on the earliest of: (i)
the close of business on the first Trading Day immediately after the last
Trading Day of the Pricing Period, (ii) the close of business on the first
Trading Day immediately after the last Trading Day of the Shortened Pricing
Period and (iii) the close of business on the first Trading Day immediately
after the Termination Date; provided that the termination of such obligation
shall not relieve either party from any liability for failure to perform such
obligation prior to such date.
5. Conditions Precedent to the Obligations of the Seller to Sell the
Shares. The obligation hereunder of the Seller to sell the Shares to the Buyer
is subject to the satisfaction or waiver, on or before the Closing, of each of
the conditions set forth below. These conditions are for the Seller's sole
benefit and may be waived by the Seller at any time in its sole discretion.
(a) This Agreement shall have been executed by the Buyer and
delivered to the Seller;
(b) The representations and warranties of the Buyer shall be true
and correct in all material respects as of the date when made and as of the
Closing and as of each Settlement Date;
(c) No statute, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction, which prohibits the
consummation of any of the transactions contemplated by this Agreement; and
6. Conditions Precedent to the Obligations of the Buyer to Purchase the
Shares. The obligation hereunder of the Buyer to purchase the Shares is subject
to the satisfaction or waiver, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Buyer's sole benefit
and may be waived by the Buyer at any time in its sole discretion:
(a) This Agreement shall have been executed by the Seller and
delivered to the Buyer;
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(b) The representations and warranties of the Seller shall be true
and correct in all material respects as of the date when made and as of this
Closing and as of each Settlement Date;
(c) No statute, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this Agreement;
(d) Prior to the first Trading Day of the Pricing Period, the
Seller and the Buyer shall have entered into an Escrow Agreement (the "Escrow
Agreement") substantially in the form of Exhibit 1 attached hereto, and the
Seller shall have delivered 2,139,500 shares of Common Stock to Xxxxxxxxx and
Company, Inc., as Escrow Agent, which Shares shall be free of all legends;
7. Indemnification.
(a) The Seller hereby agrees to indemnify and hold harmless the
Buyer and its officer, directors, shareholders, employees, agents and attorneys
against any and all losses, claims, damages, liabilities and expenses incurred
by each such person in connection with defending or investigating any such
claims or liabilities, whether or not resulting in any liability to such person,
to which any such indemnified party may become subject under the Securities Act,
or under any other statute, at common law or otherwise, insofar as such losses,
claims, demands, liabilities and expenses arise out of or are based upon (i) any
untrue statement or alleged untrue statement of a material fact made by the
Seller (ii) any omission or alleged omission of a material fact with respect to
the Seller or (iii) any breach of any representation, warranty or agreement made
by the Seller in this Agreement;
(b) The Buyer hereby agrees to indemnify and hold harmless the
Seller and its officers, directors, shareholders, employees, agents and
attorneys against any and all losses, claims, damages, liabilities and expenses
incurred by each such person in connection with defending or investigating any
such claims or liabilities, whether or not resulting in any liability to such
person, to which any such indemnified party may become subject under the
Securities Act, or under any other statute, at common law or otherwise, insofar
as such losses, claims, demands, liabilities and expenses arise out of or are
based upon (i) any untrue statement or alleged untrue statement of a material
fact made by the Seller (ii) any omission or alleged omission of a material fact
with respect to the Seller or (iii) any breach of any representation, warranty
or agreement made by the Seller in this Agreement;
8. (a) Expenses. Each of the parties agrees to pay its own expenses
incident to this Agreement and the performance of its obligations hereunder.
(b) The Seller shall pay Xxxxxxxx & Co (the "Placement Agent") a
placement fee of 1% of the aggregate amount purchased.
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9. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware without giving effect to the
rules governing the conflicts of laws. The Buyer and Seller agree that any suit
or proceeding by either of them with respect to this Agreement shall be brought
in a state or federal court located in the State of Delaware and hereby consent
to the exclusive jurisdiction of such court and to service of process being made
upon the Buyer or the Seller, as the same may be by mail at the address
specified in Section 10. Each of the Buyer and the Seller hereby waives any
objection that it may now or hereafter have in the venue or any such suit or
proceeding or any such court or that such suit is brought in an inconvenient
court.
10. Notices. All notice and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, express overnight
courier, registered first class mail, overnight courier, or telecopier,
initially to the address set forth below, and thereafter at such other address,
notice of which is given in accordance with the provisions of this Section.
if to the Seller:
UniHealth Foundation
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Chairman
Telephone 000-000-0000
Fax 000-000-0000
if to the Buyer:
Acqua Wellington North American Equities Fund, Ltd.
c/o Fortis Fund Services (Bahamas) Ltd.
Xxxxxxxx Xxxxxxxx Centre
Xxxx Xxx Xxxxxx, X.X. Xxx XX-0000
Nassau, Bahamas
Attn: Xxxxxxx X.X. Xxxxx Xxxxxx
Telephone 000-000-0000
Fax 000-000-0000
All such motions and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; three (3) business days
after being deposited in the mail, postage prepaid, if mailed; the next business
day after being deposited with an overnight courier, if deposited with a
nationally recognized, overnight courier service; when receipt is acknowledged,
if telecopied.
11. Entire Agreement. This Agreement constitutes this entire
understanding and agreement of the parties with respect to the subject matter
hereof and supersedes all prior and/or
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contemporaneous oral or written proposals or agreements relating thereto all of
which are merged herein. This Agreement may not be amended or any provisions
hereof waived in whole or in parts, except by a written amendment signed by both
of the parties.
12. Counterpart. This Agreement may be executed by facsimile signature
and in counterparts, each of which shall be deemed an original, but all of which
together shall constitute on and the same instrument.
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IN WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.
UNIHEALTH FOUNDATION
By: ______________________________________
Name: Xxxxx X. Xxxxxxxxx
Title: Chairman
AQUA WELLINGTON NORTH AMERICAN EQUITIES FUND, LTD.
By: ______________________________________
Name: Xxxxxxx Xxxxxxx
Title: Vice President
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