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EXHIBIT 4.1
September 20, 1999
Foundation Health Systems, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
Registration Rights Agreement
Gentlemen:
This letter will confirm that in connection with the settlement of
certain claims as contemplated by that certain Settlement Agreement and
Release, dated September 20, 1999, by and between Foundation Heath Systems,
Inc., a Delaware corporation, formerly known as Health Systems International,
Inc. ("Foundation"), on the one hand, and Per-Se Corporation, a Delaware
corporation ("Per-Se"), on the other hand (the "Settlement Agreement"), and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confirmed, the parties hereto hereby covenant and agree
as follows:
1. Certain Definitions. Any capitalized terms used herein without
definition shall have the meaning ascribed to such terms in the Settlement
Agreement.
2. Resale Registration Statement.
(a) Per-Se shall prepare and file with the Commission as soon as
practicable after the date hereof, but in no event more than 10 days after the
date hereof, a registration statement (the "Initial Registration Statement") on
Form S-3 or other available form with respect to resale of the Settlement
Shares by Foundation and shall use its reasonable best efforts to have the
Initial Registration Statement declared effective by the Commission as promptly
as practicable thereafter. Per-Se shall prepare and file with the Commission as
soon as practical after receipt of a notice from Foundation requiring Per-Se to
issue Additional Shares pursuant to the Settlement Agreement, but in no event
more than 3 days after the date of such notice, a registration statement (each
a "Subsequent Registration Statement" and, together with the Initial
Registration Statement, a "Registration Statement") on Form S-3 or other
available form with respect to resale of the Additional Shares by Foundation
and shall use its reasonable best efforts to have the Subsequent Registration
Statement declared effective by the Commission as promptly as practicable
thereafter. As of the date hereof, Per-Se is not aware of any events, facts or
circumstances that would cause the Commission not to promptly declare the
Initial Registration Statement effective (other than the rights of the
Commission to act
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in compliance with applicable regulations). Per-Se will allow Foundation and
its representatives and agents to conduct reasonable legal, financial and other
due diligence with respect to each Registration Statement.
(b) Per-Se and Foundation will cooperate in the preparation of each
Registration Statement for the Shares and will furnish each other with all
information concerning themselves, their subsidiaries, directors, officers, and
stockholders and such other matters as may be reasonably necessary or advisable
for the Registration Statement, filings under the state securities laws, and
any other statement or application made by or on behalf of Per-Se or Foundation
to any governmental body in connection with this Settlement Agreement and the
transactions contemplated thereby and hereby.
(c) Per-Se shall provide Foundation a reasonable opportunity for
Foundation and its representatives to review a draft of each Registration
Statement, and any amendment or supplement thereto, to correct any information
with respect to Foundation, and to incorporate the reasonable comments of
Foundation, prior to the time a Registration Statement or any amendment or
supplement thereto is filed with the Commission.
3. Effectiveness of Registration Statement. Per-Se agrees to
maintain the effectiveness of a Registration Statement from the date on which
the Commission declares the Registration Statement to be effective through the
first to occur of (i) the later of (x) the first anniversary of the Initial
Closing and (y) the first anniversary of the last Subsequent Closing; (ii) the
date on which Foundation is no longer subject to the volume limitations
pursuant to Rule 144 under the Securities Act; and (iii) the date on which
Foundation shall have sold all of the Settlement Shares and Additional Shares.
Notwithstanding the preceding sentence, if the Board of Directors of Per-Se
determines in good faith that it is in the best interests of the stockholders
of Per-Se not to disclose the existence of facts surrounding any proposed or
pending acquisition, disposition, strategic alliance, financing transaction or
other pending material event involving Per-Se, Per-Se may, by written notice to
Foundation, suspend the rights of Foundation to make sales pursuant to the
Registration Statement; provided that such period of suspension shall not
exceed twenty (20) days during the period in which the Registration Statement
is required to remain effective as provided herein; provided, further, that
Per-Se may not exercise this right of suspension more than twice during any
six-month period. As of the date hereof, Per-Se is not aware of such a pending
material event that would cause it to declare such a suspension of
effectiveness.
4. Per-Se Covenants. In connection with the preparation, filing and
effectiveness of a Registration Statement, Per-Se covenants and agrees that it
will:
a. prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration
Statement effective for such period as may be required hereunder, and
in each case to comply with the
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provisions of the Securities Act with respect to the disposition of
the Shares during such period in accordance with the intended methods
of distribution by Foundation set forth in the Registration Statement;
b. furnish to Foundation such number of copies of the
Registration Statement, each amendment and supplement thereto, in each
case including all exhibits, the prospectus included in the
Registration Statement and such other documents as Foundation may
reasonably request in order to facilitate the disposition of the
Shares by Foundation;
c. use its reasonable best efforts to register or qualify
the Shares under such other securities or blue sky laws of such
jurisdictions within the United States as Foundation reasonably
requests to keep such registration or qualification in effect for as
long as the Registration Statement is in effect and to do any and all
other acts and things which may be reasonably necessary or advisable
to enable Foundation to consummate the disposition in such
jurisdictions of the Shares then owned by Foundation;
d. at any time when a prospectus relating to the resale
of Shares is required to be delivered under the Securities Act, to
notify Foundation of the happening of any event as a result of which
the prospectus contained in the Registration Statement contains an
untrue statement of material fact or omits any fact necessary to make
the statements therein not misleading and, promptly prepare a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of Shares, such prospectus will not
contain an untrue statement of material fact or omit to state any fact
necessary to make the statements therein, in light of the
circumstances under which such statements were made, not misleading;
e. if the Registration Statement has been filed on Form
S-3 or any other available form promulgated by the Commission
permitting the incorporation of Per-Se's Commission reports or other
documents by reference, and if such "short form" thereafter becomes
unavailable for use by Per-Se for any reason, Per-Se shall as promptly
as practicable thereafter take such steps as are necessary to convert
the Registration Statement into a registration statement on Form S-1
or other available "long form," including, but not limited to, by
post-effective amendment, and shall use commercially reasonable
efforts to cause such "long-form" registration statement to become
effective as promptly as practicable thereafter and to otherwise
comply with the provisions of this Section 2;
f. use all reasonable efforts to list or admit for
trading the Settlement Shares and Additional Shares, if any, on the
NASDAQ National Market (or such other national stock exchange (or
NASDAQ Small-Cap Market) on which the Common Stock principally
trades); and
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g. if requested in connection with a Registration Statement
in which the plan of distribution includes utilizing an investment
banking firm to assist in the sale or placement of Shares, use all
reasonable efforts to furnish to the Foundation and any underwriters a
"comfort letter" signed by the independent public accountants who have
certified the Per-Se's financial statements included in such
Registration Statement, addressed to them; provided that with respect
to such opinion and "comfort letter," the following shall apply: (A)
"comfort letter" shall cover substantially the same matters with
respect to such Registration Statement (and the prospectus included
therein) as are customarily covered in accountants' letters delivered
to underwriters in underwritten public offerings of securities and
such other matters as Foundation may reasonably request; and (B) the
"comfort letter" also shall cover events subsequent to the date of
such financial statements.
5. Exchange Act Reports. From and after the date hereof, and for so
long as is necessary in order to permit Foundation to sell the Shares pursuant
to Rule 144 promulgated under the Securities Act ("Rule 144") and to maintain
the availability to Per-Se of Form S-3 or other available short-form
registration statement permitting the incorporation of Per-Se's Commission
reports or other documents by reference, Per-Se will file on a timely basis all
reports and other documents required to be filed by it pursuant to the
Securities Act and the Exchange Act, including Section 13 or 15(d) thereof; and
to furnish to Foundation, so long as Foundation owns any Shares, forthwith upon
request (i) a written statement by Per-Se that it has complied with reporting
requirements of Rule 144, the Securities Act and the Exchange Act, or that it
qualifies as a registrant whose securities may be issued or resold pursuant to
Form S-3 (or any other available short-form registration statement), (ii) a
copy of the most recent annual or quarterly report of Per-Se and such other
reports and documents so filed by Per-Se (including all exhibits), and (iii)
such other information as may be reasonably requested in availing Foundation of
any rule or regulation of the Commission which permits the selling of any such
securities of Per-Se without registration or pursuant to Form S-3 or other
available "short-form" registration statement.
6. Acknowledgment of Foundation. Foundation acknowledges that the
original issuance of the Shares was not registered under the Securities Act, or
any applicable state securities laws, in reliance upon exemptions from
registration contained in the Securities Act and such state laws, and that
Per-Se's reliance upon such exemptions is based in part upon Foundation's
representations, warranties contained in Section 7 of this Agreement.
7. Representations and Warranties of Foundation. Foundation
represents, warrants and agrees as follows:
(a) it shall not make any sale, transfer or other disposition
of the Shares without registration under the Securities Act and any
applicable state
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securities laws unless an exemption from such registration is
available and is complied with;
(b) based upon its knowledge and experience in financial and
business matters, it is familiar with investments of the sort which it
is undertaking by receiving the Shares; it is fully aware of the
problems and risks involved in making an investment of this type; and
it is capable of evaluating the merits and risks of this investment;
(c) that Foundation is financially able to bear the economic
risk of this investment;
(d) that all information with respect to Foundation provided
by Foundation in writing to Per-Se specifically for use in, and
contained in, the effective Registration Statement and any final
prospectus used in connection therewith is true and correct in all
material respects as of the date thereof; and
(e) that Foundation is an "accredited investor" as such term is
defined in rule 501(a) under the Securities Act.
8. Per-Se Stock Legend. Prior to the effectiveness of a
Registration Statement, each certificate representing Shares covered by that
Registration Statement, or any substitutions therefor, shall be stamped or
imprinted with a legend stating in substance as follows:
"The shares evidenced by this certificate have not
been registered under the Securities Act of 1933, as
amended, and may not be transferred, unless a
registration statement under the Securities Act of
1933, as amended, with respect to such shares shall
then be in effect or unless the availability of an
exemption from registration with respect to any
proposed transfer or disposition of such shares
shall be established to the reasonable satisfaction
of counsel for the issuer. In addition, these
securities have not been registered or qualified
under the securities laws of any state and may not
be sold or transferred except in a transaction which
is exempt under the applicable state securities laws
or pursuant to an effective registration or
qualification under such laws."
9. Expenses.
(a) All expenses incurred by Per-Se or Foundation in connection with
the preparation, filing and maintenance of effectiveness of each Registration
Statement, including, without limitation, all registration, filing and
qualification fees, printing expenses, fees and disbursements of counsel and
independent accountants for Per-Se, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer
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agents and registrars, but excluding any Selling Expenses (as hereinafter
defined), are herein referred to as "Registration Expenses." Notwithstanding
the foregoing, Registration Expenses shall not include the fees and
disbursements of more than one outside law firm representing Foundation. Any
underwriting discounts, selling commissions and brokerage fees, fees and
expenses of Foundation applicable to the sale of the Settlement Shares and the
Additional Shares, if any, are herein called "Selling Expenses."
(b) Per-Se will pay all Registration Expenses in connection with
each Registration Statement, any amendment thereto and any resale prospectus
filed pursuant to this Agreement and all Selling Expenses.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the state of California, without reference to California's
choice of law rules.
(b) This Agreement, the Settlement Agreement and the Take-down
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof.
(c) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
11. INDEMNIFICATION AND CONTRIBUTION.
Indemnification and Contribution in the event of any registration of
the Shares hereunder or breach of this Agreement, shall be as provided in the
Settlement Agreement.
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Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this letter
(herein sometimes referred to as this "Agreement") shall be a binding agreement
among Per-Se and Foundation.
PER-SE TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx X.X. Xxxxx
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Name: Xxxxxxxx X.X. Xxxxx
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Title: Executive Vice President
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FOUNDATION HEALTH SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Vice President, Asst. General
Counsel & Asst. Secretary
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