EXHIBIT 99.2
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
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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Xxxxxxxx X.X. Xxxxx
Executive Vice President
FOUNDATION HEALTH SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President, Asst. General
Counsel and Asst. Secretary
