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EXHIBIT 99.1
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (the "Agreement"), dated
September 20, 1999 (the "Agreement Date"), is made and entered into by and
between Foundation Health Systems, Inc., formerly known as Health Systems
International, Inc. ("Foundation"), on the one hand, and Per-Se Technologies,
Inc., a Delaware corporation formerly known as Medaphis Corporation ("Per-Se"),
on the other, in connection with the settlement (the "Settlement", as described
and defined more fully below) of the claims described below. Foundation and
Per-Se are sometimes referred to hereinafter collectively as the "Parties".
INTRODUCTION:
WHEREAS, Per-Se acquired Health Data Sciences Corporation ("HDS")
pursuant to the terms of a Merger Agreement dated May 31, 1996 (the "Merger
Agreement"), in a tax-free merger in which all of the shareholders of HDS,
including Foundation, received shares of the Common Stock of Per-Se in exchange
for their shares of HDS (the "Merger");
WHEREAS, Foundation has asserted claims against Per-Se under the
Securities Act of 1933, as amended (the "Securities Act"), and related common
law and state statutory claims, for alleged damages that relate to or arise out
of certain alleged breaches in the representations and warranties of Per-Se
contained in the Merger Agreement, certain alleged material misstatements and
omissions in the Registration Statement/Prospectus dated May 31, 1996,
delivered in connection with the Merger, and certain other alleged acts or
omissions of Per-Se and certain related persons in connection with the Merger;
WHEREAS, Per-Se and the related persons deny all liability;
WHEREAS, Per-Se and Foundation have entered into an agreement dated as
of August 23, 1999 (the "Current Agreement"), pursuant to which Foundation sold
976,771 shares of Common Stock received by Foundation in the Merger without
prejudice to any of its claims against Per-Se;
WHEREAS, the Parties now desire to settle their differences arising
out of the above-referenced facts and the Merger.
AGREEMENT:
NOW, THEREFORE, IT IS HEREBY AGREED by and among the Parties that upon
the
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Initial Closing (as defined below) the Released Claims (as defined below)
will be finally and fully compromised and settled, as follows:
1.0 The Settlement Consideration.
1.1 The Settlement Shares. In a private placement
transaction exempt from registration under the Securities Act and state
securities laws or some other applicable exemption from registration under the
Securities Act and state securities laws, Per-Se shall, on the date hereof,
issue and deliver to Foundation Six Million Two Hundred Thousand (6,200,000)
shares of Per-Se Common Voting Stock, par value $.01 per share ("Common Stock")
(the "Settlement Shares"), subject to and in accordance with the provisions set
forth herein.
1.2 Target Consideration. (a) The "Target Consideration"
shall be Sixteen Million Eight Hundred Thirty-Four Thousand Six Hundred Sixteen
Dollars ($16,834,616) (the "Initial Amount") plus the Interest Amount. The
Target Consideration shall consist of the sum of (i) the aggregate proceeds
received by Foundation, net of all discounts, commissions and registration
expenses ("Net Proceeds"), from the sale of: (A) the Settlement Shares (or such
portion thereof as is necessary to generate Net Proceeds equal to the Target
Consideration); and (B) the Additional Shares (as defined below), if any.
"Interest Amount" means the sum of (i) the aggregate amount of the Daily
Interest Amount for the period commencing one hundred eighty (180) days or, if
an Acceleration Event occurs, one hundred twenty (120) days from the date
hereof through and including the date of the Final Closing and (ii) the
Blackout Period Amount. "Daily Interest Amount" for any day shall mean an
amount equal to the product of (i) the Prime Rate and (ii) the Remaining
Balance. "Prime Rate" means the quotient obtained by dividing the annual rate
of interest publicly announced by Wachovia Bank of Georgia, N.A. (or any
successor thereto) in Atlanta, Georgia as its reference or prime rate by 365.
"Remaining Balance" means the excess of the Initial Amount over the Net
Proceeds theretofore received by Foundation from the sale of the Settlement
Shares and Additional Shares, if any, and (the Settlement Shares and the
Additional Shares, if any, being referred to collectively as the "Shares").
"Blackout Period Amount" means an amount equal to the product of (a) the Prime
Rate, (b) the Remaining Amount (as defined below) and (c) the number of days
Foundation is prohibited from selling any Shares pursuant to Section 3 of the
Registration Rights Agreement (as defined below). "Acceleration Event" means
the date on which Per-Se offers, agrees to issue, or issues, any shares of
Per-Se capital stock (including the Common Stock) or any options, warrants or
any other debt or equity securities exercisable for, or convertible into,
Per-Se capital stock except (i) pursuant to this Agreement, (ii) pursuant to
(x) written agreements in effect on the date hereof, (y) securities outstanding
on the date hereof or (z) employee and director stock option plans, in effect
on the date hereof, in the ordinary course, (iii) to new management employees
in connection with their initial employment by Per-Se and
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(iv) Common Stock issued in connection with a bona-fide acquisition or joint
venture transaction with an unrelated third party negotiated on an arms length
basis involving the issuance of securities not to exceed, individually, or in
the aggregate for all such transactions, 5% of Per-Se's outstanding Common
Stock outstanding on the date hereof (subject to appropriate adjustment in the
event of a reverse stock split or other reclassification of the Common Stock).
(b) Following the effectiveness of each registration
statement covering the Settlement Shares or Additional Shares, if any, (each a
"Registration Statement") as contemplated in that Registration Rights
Agreement, substantially in the form of Exhibit A hereto, by and between
Foundation and Per-Se (the "Registration Rights Agreement"), Foundation may
sell the Shares subject to the restrictions in this clause (b). Subject to the
proviso to this sentence and the last sentence of this clause (b), no sale of
Shares shall be consummated at a gross sale price below $3 13/32 without the
express approval by Per-Se of the terms of such sale (including, but not
limited to, the sale price); provided, however, that if at the end of the sixty
(60) day period commencing with the effective date (the "Initial Date") of the
Registration Statement covering the Settlement Shares (the "Initial
Registration Statement"), the aggregate Net Proceeds received by Foundation
from the sale of Shares does not exceed $8,500,000, Foundation shall be free to
sell without restriction or consent of Per-Se additional Shares in an amount
such that the aggregate Net Proceeds received by Foundation from the sale of
Shares equals the Target Consideration. If at the end of the one hundred twenty
(120) day period commencing with the effective date of the Initial Registration
Statement Foundation shall not have received aggregate Net Proceeds from the
sale of Shares equal to the Target Consideration, then Foundation shall be free
to sell any and all remaining Shares without restriction or consent of Per-Se
until the aggregate Net Proceeds received by Foundation from the sale of Shares
equals the Target Consideration.
(c) If, at any time prior to the Final Closing, the sum of
("Target Proceeds") (x) the aggregate Net Proceeds from the sale of Shares
theretofore received by Foundation ("Share Proceeds") and (y) the Estimated
Remaining Proceeds does not equal or exceed the Target Consideration, Per-Se
shall, within three Trading Days following notice from Foundation (an
"Additional Shares Notice") issue additional shares of Common Stock (the
"Additional Shares") to Foundation in an amount equal to the Shortfall Amount
divided by the Designated Price (The issuance date of the Additional Shares
being referred to as the "Additional Issuance Date"). "Shortfall Amount" means
the excess of the Target Consideration over the Target Proceeds. "Estimated
Remaining Proceeds" means the product of (x) the Designated Price and (y) the
number of Shares then held by Foundation. "Designated Price" means, on any
particular date, eighty percent (80%) of the average Current Market Price per
share of Common Stock for the immediately preceding five Trading Days. "Current
Market Price" shall mean when used with reference to
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shares of Common Stock, the closing price of the Common Stock on the NASDAQ
National Market (or such other national stock exchange (or NASDAQ Small-Cap
Market) on which the Common Stock principally trades). "Trading Day" means a
day on which the NASDAQ National Market is open for the transaction of
business. At such time as Share Proceeds equal or exceed the Target
Consideration, Foundation shall cease all further sales of Shares. If Share
Proceeds from the sale of Shares received by Foundation exceed the Target
Consideration (a "Surplus Amount"), at the Final Closing Foundation shall pay
to Per-Se, by certified or cashier's check or wire transfer of immediately
available funds, the Surplus Amount and transfer to Per-Se all of Foundation's
right, title and interest in and to all remaining unsold Shares (the "Surplus
Shares"). Foundation may not deliver more than one Additional Shares Notice in
any five Trading Day period.
(d) At any time during the period commencing 200 days or,
if an Acceleration Event occurs, 120 days after execution of this Agreement and
ending on the Final Closing, Foundation may, upon two Trading Days notice to
Per-Se, elect to require Per-Se to make payment to Foundation by wire transfer
of immediately available funds, in an amount equal to the lesser of (x) $2
million and (y) the Remaining Amount. "Remaining Amount" means the excess of
Target Consideration over Share Proceeds.
(e) Notwithstanding anything to the contrary, at any time
following the Initial Closing, Per-Se may upon three Trading Days' notice to
Foundation, elect to make a Close-out Payment to Foundation. The receipt by
Foundation of a Close-out Payment and the return to Per-Se of all Shares then
held by Foundation shall constitute a Final Closing. "Close-out Payment" means
an amount in cash equal to the Remaining Amount.
2.0 Releases.
2.1 General Release by Foundation. Subject to and
conditioned upon the occurrence of the Initial Closing, including, but not
limited to, the delivery and registration of the Settlement Shares and, the
receipt by Foundation of $4,612,500 (the "D&O Settlement Amount") pursuant to
the D&O Settlement Agreement (as defined below), Foundation on behalf of itself
and for each and all of its respective predecessors, parents, subsidiaries,
successors, assigns, heirs, agents and others claiming through or under it (for
which it has the power and authority), shall have and shall hereby be deemed to
have, fully, finally and forever released, relinquished, and discharged all
"Foundation Released Claims" (as defined below) against the "Per-Se Released
Persons" (as defined below).
(a) "Foundation Released Claims" collectively
means all claims,
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demands, rights, liabilities, and causes of action, known or unknown, accrued
or unaccrued, fixed or contingent, direct or derivative, individual or
representative, of every nature and description whatsoever, from the beginning
of time down to the date of this Agreement arising out of or relating to
Foundation's investment in HDS, any business relationship or contract between
Foundation and HDS or Per-Se, Foundation's purchase, sale, or ownership of
Per-Se Common Stock, options, or other Per-Se securities or pursuant to or in
connection with the Merger, or arising out of or relating to any of the claimed
acts, omissions, misrepresentations, facts, events, matters, transactions, or
occurrences referred to in the introduction to this Agreement, or as alleged in
1996 Medaphis Corporation Securities Litigation, (N.D. Ga.), Civil Action No.
1:96-CV-2088-TWT ("Medaphis II"), or Health Systems International, Inc. v.
Medaphis Corporation, (Super. Ct. L.A. County, CA), No. BC 160414 (the "Pending
Matter"), including, without limitation, any of Per-Se's restatements of any of
its financial statements, excepting from such release only those rights and
obligations expressly created by or presented by the terms of this Agreement.
(b) "Per-Se Released Persons" means Per-Se and
each of its respective past or present directors; officers; employees;
partners; principals; agents; underwriters; issuers; insurers; co-insurers;
reinsurers; shareholders; attorneys (including, without limitation, King &
Spalding; Xxxxxxx Xxxx, Slate, Meager & Xxxx LLP (solely with respect to work
performed for Per-Se); Paul, Hastings, Xxxxxxxx & Xxxxxx; and any present and
former partners or employees thereof); accountants (except for the firm of
Deloitte Touche including, without limitation, with respect to any claims
asserted in or which could be asserted in the action entitled Xxxxxx Capital
Investors v. Deloitte & Touche, LLP.) investment bankers (solely with respect
to work performed for Per-Se); advisors (solely with respect to work performed
for Per-Se); brokerage firms (solely with respect to work performed for
Per-Se); personal representatives; predecessors; successors; parents;
subsidiaries; divisions; assigns; spouses; heirs; associates; affiliates, any
members of their immediate families; any person, firm, trust, corporation,
officer, director, or other individual or entity in which any Defendant has a
controlling interest or which is related to or affiliated with any Defendant or
any trust of which any Defendant is the settlor or which is for the benefit of
any Defendant or member of his or her family; and shall include any individual,
group, or entity who directly or indirectly participated in the dissemination
of information about Per-Se or who directly or indirectly is responsible for
any of the damages alleged by Foundation, including, without limitation, any
securities analysts or brokerage firms.
2.2 General Release by Per-Se. Subject to the
satisfaction of the conditions to the Initial Closing, including, but not
limited to, the delivery and registration of the Settlement Shares, Per-Se, on
behalf of itself and for each and all of its respective predecessors, parents,
partners, subsidiaries, affiliates, associates, successors, assigns, agents and
others claiming through
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or under it (for which it has power and authority), shall have and shall hereby
be deemed to have, fully, finally, and forever released, relinquished, and
discharged all "Per-Se Released Claims" (as defined below) against the
"Foundation Released Persons" (as defined below).
(a) "Per-Se Released Claims" collectively means
all claims, demands, rights, liabilities, and causes of action, known or
unknown, accrued or unaccrued, fixed or contingent, direct or derivative,
individual or representative, of every nature and description whatsoever, from
the beginning of time down to the date of this Agreement arising out of or
relating to Foundation's investment in HDS, any business relationship or
contract between Foundation and HDS or Per-Se, Foundation's ownership of Per-Se
Common Stock or arising out of or relating to the Merger and any related
agreements or transactions excepting therefrom only those rights and
obligations expressly created or preserved by the terms of this Agreement.
(b) "Foundation Released Persons" means
Foundation and its respective past or present directors, officers, employees,
partners, principals, agents, underwriters, issuers, insurers, co-insurers,
reinsurer, shareholders, attorneys, (including, without limitation Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx; and any present or former partners or
employees of the foregoing firm), accountants (solely with respect to work
performed for Foundation), investment bankers (solely with respect to work
performed for Foundation), advisors (solely with respect to work performed for
Foundation), brokerage firms (solely with respect to work performed for
Foundation), predecessors, successors, parents, subsidiaries, divisions,
assigns, associates and affiliates. The Per-Se Released Claims and the
Foundation Released Claims sometimes are referred to collectively as the
"Released Claims".
2.3 California Civil Code. Effective as of the Initial
Closing and the giving of the releases described above, the Parties knowingly,
voluntarily, and expressly waive and relinquish any and all rights that they
may have under Section 1542 of the California Civil Code, or any similar
provision or law of any jurisdiction or any similar or analogous principle of
common law. California Civil Code Section 1542 provides:
A general release does not extend to claims which
the creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor.
3.0 Closings and Conditions.
3.1 Initial and Subsequent Closings. Subject to the
satisfaction or waiver of the conditions set forth in section 3.2 below, a
closing (the "Initial Closing") shall occur on the date on
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which the Initial Registration Statement is declared effective by the
Securities Exchange Commission (the "Commission") or as soon thereafter as the
conditions in Section 3.2 are satisfied. A closing shall also occur on the date
on which each Registration Statement covering Additional Shares issued pursuant
to Section 1.2(c) is declared effective by the Commission (a "Subsequent
Closing" and, together with the Initial Closing, referred to herein as an
"Interim Closing"). A closing (the "Final Closing") shall also occur on the
third Trading Day following the receipt by Foundation of Share Proceeds and
cash from Per-Se pursuant to Section 1.2(c) or (d) equal to the Target
Consideration.
3.2 Conditions to Initial Closing.
(a) Conditions to Foundation's Obligations. The
obligations of Foundation to consummate the transactions contemplated by the
Agreement are subject to the fulfillment (or written waiver) on or before the
Initial Closing of each of the following conditions:
(i) Performance. Per-Se shall have
performed and complied in all material respects with all agreements,
obligations, and conditions contained in this Agreement and the Registration
Rights Agreement that are required to be performed or complied with by it on or
before the Initial Closing, and Per-Se shall have delivered to Foundation a
certificate of its President and Chief Financial Officer, dated as of the date
of the Initial Closing, to that effect.
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(ii) Compliance with Laws. All
applicable federal and state laws shall have been complied with by Per-Se in
connection with the issuance of the Settlement Shares to Foundation in a
qualifying private placement or pursuant to some other applicable exemption
from registration under the Securities Act and state securities laws.
(iii) Proceedings and Documents.
Foundation shall have received the legal opinion (the "Legal Opinion") of
Xxxxxx & Bird LLP (which opinion may rely on the legal opinion of the General
Counsel to Per-Se solely as to matters of Per-Se's Board of Directors approvals
and related corporate approval matters) and Xxxxxx, Xxxxxx & Xxxxx LLP, (or
such other outside law firms acceptable to Foundation) dated the date of the
Initial Closing in substantially the form of Exhibit B with such assumptions
and exceptions as are customary. All corporate and other proceedings in
connection with the transactions contemplated herein and all documents incident
thereto shall be reasonably satisfactory in form and substance to counsel to
Foundation, and they shall have received all such counterpart original and
certified or other copies of such documents as they may reasonably request
executed by Per-Se.
(iv) No Injunction. At the time of the
Initial Closing there shall be no effective injunction, writ, or preliminary
restraining order or any order of any nature issued by a court or governmental
agency of competent jurisdiction to the effect that the transactions
contemplated herein may not be consummated as herein provided; no proceeding or
lawsuit shall have been commenced by any governmental agency or regulatory
agency for the purpose of obtaining any such injunction, writ, or preliminary
restraining order; and no written notice shall have been received from any such
agency indicating an intent to restrain, prevent, materially delay, or
restructure the transactions contemplated by this Agreement. There shall be no
lawsuit filed or threatened that challenges this Agreement, the Registration
Rights Agreement, the Take-Down Agreement, or the D&O Settlement Agreement or
any of the transactions contemplated hereby or thereby.
(v) Representations and Warranties.
The representations and warranties of Per-Se contained in this Agreement shall
be true and correct when made and on and as of the date of the Initial Closing
with the same effect as though such representations and warranties had been
made on and as of the Initial Closing and Per-Se shall have delivered to
Foundation a certificate of its President and Chief Financial Officer, dated as
of the Initial Closing, to that effect.
(vi) Status.
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(a) Foundation shall have
received the D&O Settlement Amount pursuant to the D&O Settlement Agreement.
(b) The Initial Registration
Statement shall have been declared effective and no stop order shall have been
issued by the Commission.
(c) The Registration Rights
Agreement shall be in full force and effect.
(d) Foundation, Per-Se and
Xxxxxxxxx, Lufkin & Xxxxxxxx ("DLJ") shall have entered into an agreement (the
"Take-Down Agreement"), in substantially the form attached hereto as Exhibit D,
pursuant to which DLJ shall assist Foundation in the sale of Shares and the
Take-Down Agreement shall be in full force and effect.
(e) Foundation shall have
been satisfied, in its sole discretion, with the results of the due diligence
investigation of Per-Se undertaken by DLJ and/or others in connection with the
sale of Shares pursuant to the Registration Statement.
(vii) NASDAQ Listing. The Settlement
Shares shall have been approved for listing on the NASDAQ National Market (or
another national securities exchange (or NASDAQ Small-Cap Market) on which the
Common Stock may hereafter be listed or quoted), subject only to official
notice of issuance by Per-Se.
(viii) No Bankruptcy. Per-Se shall not,
voluntarily or involuntarily, have entered into any bankruptcy, reorganization,
or similar proceeding to seek protection from creditors or to reorganize its
affairs under the Federal Bankruptcy Act or otherwise become insolvent or
unable to pay its debts and liabilities as they accrue which, in the case of an
involuntary bankruptcy, reorganization or similar proceeding shall not have
been dismissed within sixty (60) days of commencement of the proceeding.
(ix) Qualifications. All
authorizations, approvals, or permits, if any, of any governmental authority or
regulatory agency of the United States or any state that are required in
connection with the lawful issuance of the Settlement Shares pursuant to this
Agreement shall be duly obtained and effective as of the Initial Closing.
(x) Order. An order from the Los
Angeles Superior Court, substantially in the form attached hereto as Exhibit C,
shall have been issued in the Pending Matter.
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(b) Conditions to Per-Se's Obligations. The
obligations of Per-Se to consummate the transactions contemplated by the
Agreement are subject to the fulfillment (or waiver) on or before the Initial
Closing of each of the following conditions:
(i) Representations and Warranties.
The representations and warranties of Foundation contained in this Agreement
shall be true and correct when made on and as of the Initial Closing, with the
same effect as though such representations and warranties had been made on and
as of the Initial Closing, and Foundation shall have delivered to Per-Se a
certificate from its President and Chief Financial Officer, dated as of the
date of the Initial Closing, to that effect.
(ii) Performance. Foundation shall have
performed and complied in all material respects with all agreements,
obligations, and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Initial Closing.
(iii) Proceedings and Documents. All
corporate and other proceedings in connection with the transactions
contemplated at the Initial Closing and all documents incident thereto shall be
reasonably satisfactory in form and substance to counsel to Per-Se, and Per-Se
shall have received all such counterpart original and certified or other copies
of such documents as it may reasonably request executed by Foundation.
(iv) No Injunction. At the time of the
Initial Closing there shall be no effective injunction, writ, or preliminary
restraining order or any order of any nature issued by a court or governmental
agency of competent jurisdiction to the effect that the transactions
contemplated hereby may not be consummated as herein provided; no proceedings
or lawsuit shall have been commenced by any governmental or regulatory agency
for the purpose of obtaining any such injunction, writ, or preliminary
restraining order; and no written notice shall have been received from any such
agency indicating an intent to restrain, prevent, materially delay, or
restructure the transactions contemplated by this Agreement.
(v) Order. An order from the Los
Angeles Superior Court, substantially in the form attached hereto as Exhibit C,
shall have been issued in the Pending Matter.
3.3 Subsequent Closings.
At each Subsequent Closing, Per-Se shall:
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(i) cause to be delivered to Foundation the
Legal Opinion dated as of the date of the Subsequent Closing.
(ii) cause the Additional Shares to be listed on
the NASDAQ National Market (or such other national stock exchange (or NASDAQ
Small-Cap Market) on which the Common Stock may hereafter be listed or quoted).
(iii) perform and comply in all material respects
with all agreements, obligations and conditions contained in this Agreement and
the Registration Rights Agreement that are required to be performed or complied
with by it on or before the Subsequent Closing, and shall deliver to Foundation
a certificate of Per-Se's President and Chief Financial Officer, dated as of
the date of the Subsequent Closing, to that effect.
(iv) deliver to Foundation a certificate of
Per-Se's President and Chief Financial Officer, dated as of the date of the
Subsequent Closing, to the effect that each of the representations and
warranties of Per-Se contained in this Agreement are true and correct in all
material respects as of the Additional Issuance Date and as of the date of the
Subsequent Closing with the same effect as though such representations and
warranties had been made on and as of the Additional Issuance Date and the
Subsequent Closing (except that Per-Se may (a) effect a reverse stock split as
may be necessary to comply with the listing requirements of the NASDAQ National
Market and (b) issues shares of its capital stock as contemplated or permitted
by this Agreement).
3.4 Final Closing.
(i) Receipt of Net Cash Amount. Foundation
shall have received Net Proceeds from the sale of Shares and cash from Per-Se
pursuant to this Agreement equal to the Target Consideration.
(ii) Receipt of Surplus Amount and Surplus
Shares. At the Final Closing, Foundation shall deliver to Per-Se the Surplus
Amount and the Surplus Shares.
(iii) Receipt of Receivables Amount. At the Final
Closing, Foundation shall deliver to Per-Se the Receivables Amount.
"Receivables Amount" means the amounts set forth below for the appropriate date
of the Final Closing; provided, however, if an Acceleration Event occurs, the
Receivables Amount shall be $0 for a Final Closing occurring more than 125 days
after the Initial Date:
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Receivables Amount Date of Final Closing
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$1,426,539 within 35 days of the Initial Date
$1,248,221 35 days and prior to 65 days from the Initial Date
$1,069,904 65 days and prior to 95 days from the Initial Date
$ 891,587 95 days and prior to 125 days from the Initial Date
$ 713,269 125 days and prior to 155 days from the Initial Date
$ 534,952 155 days and prior to 185 days from the Initial Date
$ 356,634 185 days and prior to 215 days from the Initial Date
$ 178,317 215 days and prior to 245 days after the Initial Date
$ 0 245 or more days after the Initial Date.
3.5 Location. The Interim Closings and Final Closing shall
take place at Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxx Xxxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 9:00 a.m. on the dates provided herein or at
such other place or time as the parties shall mutually agree.
4.0 Additional Agreements.
4.1 NASDAQ National Market Additional Shares Notification.
Per-Se shall file an additional shares notification with the NASDAQ National
Market (or any national securities exchange (or NASDAQ Small-Cap Market) on
which the Common Stock may hereafter be principally listed or quoted) to
approve for listing, subject to official notice of issuance, the Shares and
shall cause the Shares to be approved for quotation and trading on the NASDAQ
National Market (or any national securities exchange (or NASDAQ Small Cap
Market) on which Per-Se Common Stock may hereafter be listed or quoted).
4.2 Public Announcements. The timing and content of all
statements,
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announcements, and filings regarding any aspect of this Agreement to the
financial community, government agencies, employees, or the general public
shall be mutually agreed upon in advance (unless Per-Se or Foundation are
advised by counsel that any such announcement or other disclosure not mutually
agreed upon in advance is required to be made by law or applicable rule of the
NASDAQ National Market or the New York Stock Exchange, Inc., as applicable, and
then only after making a reasonable attempt to comply with the provisions of
this Section 4.2).
4.3 Further Assurances. Each Party will diligently perform
all acts, and execute and deliver all documents, reasonably necessary to effect
all provisions of this Agreement and the agreements executed in connection
herewith.
4.4 Tax Matters. The Parties agree that, for Federal and
state income tax purposes, they will treat and report the issuance of the
Shares (or any other consideration to be paid to Foundation hereunder) as
additional consideration delivered to Foundation in connection with the Merger,
with no portion being treated or reported as imputed interest. The Parties
further agree not to take any position inconsistent with such treatment before
any taxing or other governmental authorities.
4.5 No Reduction of Minimum Cash Payment. Per-Se covenants
and agrees that until the Final Closing, except as expressly contemplated
herein, it will not take or permit to be taken any action (other than in the
ordinary course of business operations), including, without limitation, any
amendment of the Indenture, dated as of February 26, 1998 (the "Indenture")
among Per-Se, the Subsidiary Guarantors and State Street Bank and Trust, as
Trustee, that has the effect, directly or indirectly, of reducing the amount of
cash that is permitted to be paid by Per-Se to Foundation pursuant to Section
1.2(d) without constituting an Event of Default under the Indenture.
4.6 Legal Matters. Prior to the Initial Closing, the
parties shall present a joint motion to the Los Angeles Superior Court in the
Pending Matter to retain jurisdiction in the matter pursuant to ss. 664.6, and
to toll all applicable statutes, rules or court orders affecting timely
prosecution of the Pending Matter, including the 5-year dismissal statute.
4.7 Representations. Prior to the Final Closing, Per-Se
shall take no action (or suffer to occur any action or omission) that causes or
is reasonably likely to cause any of the representations or warranties in this
Agreement to be untrue or incorrect in any material respect on the date of any
Interim Closing or on any Additional Issuance Date.
4.8 Continued Listing. At all times prior to the Final
Closing, Per-Se shall cause the outstanding shares of Common Stock to be listed
on the NASDAQ National Market (or
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another national securities exchange or NASDAQ Small-Cap Market).
4.9 Dismissal of Claims; Continuing Jurisdiction.
Concurrently with the Initial Closing, Foundation shall dismiss with prejudice
the claims in the Pending Matter, subject to the retained jurisdiction of the
Court to enforce the terms of this Settlement Agreement, the Registration
Rights Agreement and the other agreements executed in connection herewith.
4.10 Issuance of Additional Shares. Per-Se shall comply
with all applicable federal and state laws in connection with the issuance of
the Additional Shares to Foundation in a qualifying private placement or
pursuant to some other applicable exemption from registration under the
Securities Act and state securities laws.
4.11 Payment of the Receivables Amount. At the Final
Closing, Foundation shall pay to Per-Se, by certified or cashier's check or
wire transfer of immediately available funds, the Receivables Amount.
5.0 Representations and Warranties .
5.1 Representations and Warranties of Per-Se. Per-Se
represents and warrants to Foundation as follows:
A. DULY ORGANIZED, VALIDLY EXISTING, GOOD STANDING.
Per-Se is a duly organized and validly existing corporation in good standing
under the laws of the State of Delaware and is qualified to do business and is
in good standing as a foreign corporation in all jurisdictions where the nature
of the property owned by it or leased by it, or the nature of the business
conducted by it, makes such qualification necessary and the absence of which
qualification would not, individually or in the aggregate, have a material
adverse effect on the business, condition (financial or otherwise), assets or
results of operations of Per-Se and its subsidiaries, taken as a whole (a
"Material Adverse Effect"). Per-Se has the corporate power and authority to own
its properties, to transact the business in which it is engaged, and to perform
its obligations under this Agreement, the Registration Rights Agreement and the
other agreements executed in connection herewith.
B. AUTHORITY. The execution and delivery by Per-Se of
this Agreement, the Registration Rights Agreement and the other agreements
executed in connection herewith, and the issuance and delivery by Per-Se of the
Shares have been duly authorized and all necessary corporate action has been
taken, and such issuance and deliveries will not contravene or conflict with,
or, except as expressly contemplated by this Agreement, require any approval,
authorization,
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15
permit of or filing with or pursuant to (i) the Certificate of Incorporation or
Bylaws of Per-Se, (ii) any law, rule or regulation, or (iii) any agreement to
which Per-Se is a party, except, solely in the case of clause (iii) such
contravention or conflict that would not, individually or in the aggregate,
have a Material Adverse Effect. Subject to (i) applicable bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium, or similar laws
from time to time in effect affecting creditor's rights generally and (ii)
general principles of equity (including, without limitation, standards of
materiality, good faith, fair dealing and reasonableness), whether such
proceedings are considered in a proceeding at law or in equity, this Agreement,
the Registration Rights Agreements and the other agreements executed in
connection herewith have been duly executed and delivered by Per-Se and
constitute legal, valid and binding obligations of Per-Se, enforceable against
Per-Se in accordance with their terms.
C. CAPITALIZATION. The authorized capital stock of Per-Se
consists of 200,000,000 shares of Common Stock, $.01 par value per share (the
"Common Stock"), 600,000 shares of Non-Voting Common Stock, $.01 par value per
share (the "Non-Voting Common Stock"), and 20,000,000 shares of Preferred
Stock, no par value (the "Preferred Stock"), of which 84,733,413 shares of
Common Stock and no shares of Non-Voting Common Stock or Preferred Stock are
issued and outstanding as of August 25, 1999. All of the issued and outstanding
shares of Common Stock are validly issued, fully paid and non-assessable. As of
August 25, 1999, there are outstanding warrants to acquire 5,910,275 shares of
Common Stock. As of August 25, 1999, there are outstanding options to acquire
9,978,852 shares of Common Stock. Except as set forth in this Section, there
are no outstanding securities convertible into, exchangeable for, or carrying
the right to acquire, or any voting agreements with respect to, any equity
securities of Per-Se, or subscriptions, warrants, options, rights or other
arrangements or commitments obligating Per-Se to issue or acquire any of its
equity securities or any ownership interest therein. The Shares when issued
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable, and will be free and clear of any liens or encumbrances, except
restrictions on transfer in compliance with federal and state securities laws.
The Shares, when issued, will be issued in compliance with all applicable
federal and state securities laws in a qualifying private placement or pursuant
to some other applicable exemption from registration under the Securities Act
and state securities laws.
D. NO UNTRUE STATEMENTS. Since January 1, 1999 Per-Se has
filed all forms, reports and documents ("Per-Se SEC Reports") required to be
filed with the Commission. Since January 1, 1999 all of the filings of Per-Se
with the Commission conform to the disclosure requirements of the federal
securities laws in all material respects and none of such filings contains or
contained at the time of filing an untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
Per-Se's subsidiaries is required to file any forms, reports
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or other documents with the Commission. Each of the consolidated financial
statements (including, in each case, any related notes thereto) contained in
the Per-Se SEC Reports was prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto), and each fairly
presents in all material respects the consolidated financial position of Per-Se
and its subsidiaries as at the respective date thereof and the consolidated
results of their operations and cash flows and stockholders' equity for the
periods indicated, except that the unaudited interim financial statements (i)
were or are subject to normal and recurring year-end adjustments which were not
or are not expected to be material in amount and (ii) do not contain the
footnotes required by generally accepted accounting principles. Since June 30,
1999, there has not been any change which would have a Material Adverse Effect
nor has there been any damage, destruction or loss, whether covered by
insurance or not, having a Material Adverse Effect.
E. CONTRACTS. Neither Per-Se nor any of its Subsidiaries
has breached, is in default under, or has received written notice of any breach
of or default under, any material agreement, contract or other instrument to
which it is a party; to the knowledge of Per-Se, no other party to any such
agreement, contract or other instrument has breached or is in default of any of
its obligations thereunder; and each of such agreements, contracts and other
instruments is in full force and effect, except in any such case for breaches,
defaults or failures to be in full force and effect that have not had and could
not reasonably be expected to have a Material Adverse Effect.
F. COMPLIANCE WITH LAWS. Neither Per-Se nor any person or
any entity acting on its behalf, has taken or will take any action which might
subject the issuance of the Settlement Shares or the Additional Shares to
Foundation to the registration requirements of the Securities Act or any state
securities laws. Neither Per-Se nor any of its subsidiaries is in conflict
with, or in default or violation of, any law, rule or regulation applicable to
Per-Se or any of its Subsidiaries or by which any of their respective
properties are bound or affected (except for violations which would not have a
Material Adverse Effect).
G. NO UNDISCLOSED LIABILITIES. Neither Per-Se nor any of
its Subsidiaries has any liabilities (absolute, accrued, contingent or
otherwise), except liabilities (a) adequately provided for or disclosed in the
audited balance sheet (including any related notes thereto) of Per-Se for the
period ending December 31, 1998 included in the Per-Se SEC Reports (the "Per-Se
1998 Balance Sheet"), (b) which should not be reflected under generally
accepted accounting principles on the Per-Se 1998 Balance Sheet, (c) incurred
since December 31, 1998 in the ordinary course of business consistent with past
practice, (d) incurred in connection with this Agreement or (e) disclosed in
Per-Se XXX Xxxxxxx.
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00
X. NASDAQ. The outstanding shares of Common Stock are
listed on the NASDAQ National Market (or another national securities exchange
(or NASDAQ Small-Cap Market) on which the Common Stock principally trades), and
the Company's listing agreement with respect thereto is in full force and
effect. Except as set forth in Schedule H, (i) no event has occurred, and no
facts exist, that could cause NASDAQ to delist or suspend from trading the
Common Stock and (ii) no action has been taken or threatened by NASDAQ with
respect to the delisting or suspension from trading of the Common Stock.
I. OWNERSHIP OF CLAIMS. Per-Se (i) has not prior to the
date hereof, sold, transferred, conveyed, encumbered, or assigned any portion
of such rights as are being settled and released in this Agreement; and (ii) is
the sole and exclusive holder of such rights.
J. MINIMUM CASH PAYMENT. As of the date hereof, at least
$2 million may be paid by Per-Se to Foundation hereunder without causing an
Event of Default under the Indenture.
K. NO CHANGE. Since June 30, 1999, except as disclosed in
filings with the Commission prior to the date hereof or otherwise disclosed in
this Agreement, no change (or any condition, event or development involving a
prospective change) has occurred or been threatened which would have or could
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on (a) the business, properties, operations, condition
(financial or other), prospects, liabilities or capitalization of Per-Se, (b)
the ability of Per-Se to perform its obligations under this Agreement or any
agreement executed in connection herewith or (c) the validity or enforceability
of this Agreement or any agreement to be executed in connection herewith.
5.2 Representations and Warranties of Foundation.
Foundation represents and warrants to Per-Se as follows:
A. DULY ORGANIZED, VALIDLY EXISTING, GOOD STANDING.
Foundation is a duly organized and validly existing corporation in good
standing under the laws of the State of Delaware and has the corporate power
and authority to own its properties, to transact the business in which it is
engaged, and to perform its obligations under this Agreement.
B. AUTHORITY. The execution and delivery by Foundation of
this Agreement, the Registration Rights Agreement and the other agreements
executed in connection herewith have been duly authorized and all necessary
corporate action has been taken, and such execution and delivery will not
contravene or conflict with the Certificate of Incorporation or Bylaws of
Foundation. Subject to (i) applicable bankruptcy, insolvency, reorganization,
fraudulent
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transfer, moratorium, or similar laws from time to time in effect affecting
creditor's rights generally and (ii) general principles of equity (including,
without limitation, standards of materiality, good faith, fair dealing and
reasonableness), whether such proceedings are considered in a proceeding at law
or in equity, this Agreement, the Registration Rights Agreement and the other
agreements executed in connection herewith have been duly executed and
delivered by Foundation and constitute legal, valid and binding obligations of
Foundation, enforceable against Foundation, in accordance with their terms.
C. OWNERSHIP OF CLAIMS. Foundation (i) has not prior to
the date hereof, sold, transferred, conveyed, encumbered, or assigned any
portion of such rights as are being settled and released in this Agreement; and
(ii) is the sole and exclusive holder of such rights.
6.0 Termination.
6.1 Termination and Abandonment. This Agreement may be
terminated at any time prior to Final Closing:
(a) By written agreement among Per-Se and
Foundation;
(b) By Foundation, if an agreement (the "D&O
Settlement Agreement") settling Foundation's claims against the directors and
officers of Per-Se in connection with the Merger, in form and substance
satisfactory to Foundation, shall not have been executed and delivered on or
prior to September 24, 1999;
(c) By Foundation, if the condition set forth in
Section 3.2(a)(vi)(a) shall not have been satisfied on or prior to October 1,
1999;
(d) By Foundation, if the Take-Down Agreement
shall not have been executed and delivered on or prior to the date the Initial
Registration Statement is filed with the Commission; or
(e) By Foundation, if the conditions set forth
in Section 3.2(a) for an Initial Closing are not complied with or performed and
such noncompliance or nonperformance has not been cured or eliminated after
diligent efforts by Per-Se (or by its nature cannot be cured or eliminated) on
or before 60 days after execution of this Agreement (the "Termination Date").
6.2 Effect of Termination. In the event of termination of
this Agreement pursuant to Section 6.1, this Agreement shall forthwith become
void, except for this Section 6.2 and
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Sections 7.0 and 8.13, which shall survive such termination.
7.0 Indemnification.
7.1 Indemnification by Per-Se. Per-Se shall indemnify and
hold harmless Foundation and each of its respective affiliates, directors,
officers, employees, agents (including, without limitation, DLJ or any other
broker hired to conduct due diligence of Per-Se or to arrange for the sale of
Shares), successors and assigns and other persons, if any, who control or are
otherwise affiliated (within the meaning of the Securities Act) with Foundation
(the "Foundation Indemnified Parties") from and against any cost, damage,
disbursement, expense, liability, judgment, loss, deficiency, obligation,
penalty, or settlement of any kind or nature, whether foreseeable or
unforeseeable, including, but not limited to, interest or other carrying costs,
penalties, reasonable legal, accounting and other professional, expert witness
and consultant fees and reasonable expenses incurred in the investigation,
collection, prosecution, and defense of claims and amounts paid in settlement
(collectively, "Losses") that may be imposed on, incurred, or suffered by the
Foundation Indemnified Parties as a result of any of the following matters:
(a) The inaccuracy or breach of any of the
representations, warranties, covenants, or obligations of Per-Se contained
herein, in the Registration Rights Agreement or in any other document delivered
by Per-Se to Foundation pursuant to the terms and provisions hereof; or in
connection with the consummation of the transactions contemplated hereby; or
(b) Any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or other
Commission filing or report submitted by Per-Se with respect to this Agreement
or the Settlement, or in any amendment or supplement thereto, or in any state
application for qualification, permit, exemption, or registration as a
broker/dealer, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading; provided,
however, that Per-Se shall not be liable, in any such case, to the extent that
any such cost, damage, disbursement, expense, liability, judgment, loss,
deficiency, obligation, penalty, or settlement arises out of or is based solely
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, or any such amendment or
supplement thereto, or in any such statement, application for qualification,
permit, exemption or registration as a broker/dealer, or in any amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to Per-Se by or on behalf of any Foundation Indemnified Party
specifically for use therein.
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7.2 Indemnification by Foundation. Foundation shall
indemnify and hold harmless Per-Se and each of the respective affiliates,
directors, officers, employees, agents, successors and assigns and other
persons, if any, who control or are otherwise affiliated (within the meaning of
the Securities Act) with Per-Se (collectively, the Per-Se Indemnified Parties")
from and against any cost, damage, disbursement, expense, liability, judgment,
loss, deficiency, obligation, penalty, or settlement of any kind or nature,
whether foreseeable or unforeseeable, including, but not limited to, interest
or other carrying costs, penalties, reasonable legal, accounting and other
professional, expert witness and consultant fees and reasonable expenses
incurred in the investigation, collection, prosecution, and defense of claims
and amounts paid in settlement (collectively, "Losses") that may be imposed on,
incurred, or suffered by any such Per-Se Indemnified Party as a result of any
of the following matters:
(a) The inaccuracy of breach of any of the
representations, warranties, covenants or obligations of Foundation contained
herein, in the Registration Rights Agreement or in any other document delivered
by Foundation pursuant to the terms and provisions hereof; or
(b) Solely to the extent to which it results
directly from written information supplied by Foundation specifically for
inclusion therein and not corrected by Foundation prior to the effective date
of the Registration Statement, any untrue statement or alleged untrue statement
of a material fact with respect to Foundation contained in a registration
statement or other Commission filing or report submitted by Per-Se with respect
to this Agreement or the Settlement Shares, or in any amendment or supplement
thereto, or in any state application for qualification, permit, exemption, or
registration as a broker/dealer, or in any amendment or supplement thereto, or
arising out of or are based upon any omission or alleged omission to state
therein a material fact with respect to Foundation required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made with respect to Foundation, not
misleading.
7.3 Procedures. If any action indemnifiable under this
Section 7.0 shall be brought, asserted, or threatened against any person
indemnified under this Section 7.0, the indemnified person shall promptly
notify the indemnifying person. A failure to notify the indemnifying person
timely or at all shall reduce the liabilities and obligations of the
indemnifying person under this Section 7.0 only to the extent the indemnifying
person actually shall be prejudiced by the failure. The indemnifying person
shall assume the defense of the action, including the employment of counsel
reasonably satisfactory to both the indemnified and indemnifying person and the
payment of all related fees and expenses, but the indemnified person may employ
separate counsel in the action and participate in the defense of the action at
its own
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expense. The indemnified person, however, may by written notice to the
indemnifying person assume the defense of the action, including the employment
of counsel, at the expense of the indemnifying person (except that the
indemnifying person shall not be liable for the fees and expenses of more than
one such separate counsel with respect to the action) if:
(a) The indemnifying person fails to take one or
more of the following acts without a delay that reasonably could be expected to
be prejudicial to the interests of the indemnified person: (i) acknowledge in
writing to the indemnified person the liability of the indemnifying person to
the indemnified person under this Section 7.0 with respect to the action, (ii)
assume the defense, or (iii) employ counsel reasonably satisfactory to the
indemnified person;
(b) The persons against whom the action shall
have been brought, asserted, or threatened (including any impleaded parties)
include both the indemnified person and the indemnifying person and there may
be one or more legal defenses available to the indemnified person that are
different from or in addition to those available to the indemnifying person; or
(c) The indemnified person reasonably believes
that the action or an unfavorable resolution of the action may materially and
adversely affect the business, properties, operations, prospects, or condition
(financial or otherwise) of the indemnified person and its affiliates other
than as a result of the payment of money damages or seeks injunctive or other
equitable relief.
If the indemnified person has assumed the defense of
the action pursuant to any of the conditions stated above, then the
indemnifying person shall not have the right to assume the defense of the
action on behalf of the indemnified person and the indemnified person shall
have the right to control the defense, compromise, or settlement of any action
indemnifiable under this Section 7.0 on behalf of and for the account and risk
of the indemnifying person. The indemnifying person shall be bound by the
result of the defense of any action, whether the defense shall have been
assumed by the indemnifying person or by the indemnified person, and shall
indemnify the indemnified persons against, and hold the indemnified person
harmless from, any loss in any way relating to or allegedly arising in
connection with the matters which shall be the basis of the action or otherwise
connection to the action, except that the indemnifying person shall not be
liable for the payment of the amount of money damages provided in a settlement
of any action indemnifiable under this Section 7.0 defended by the indemnified
person pursuant to Subsections 7.3(b) or 7.3(c) above that shall have been
effected without the written consent of the indemnifying person, which consent
shall not be unreasonably withheld or delayed.
7.4 Appeal. Notwithstanding anything in this Section 7.0
to the contrary, if, in
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connection with an action indemnifiable under this Section 7.0, a court,
governmental body, or other authority of competent jurisdiction or other person
having authority or jurisdiction over a matter or matters related to the action
shall have rendered, entered, or granted a binding judgment, decision, ruling,
order, matter or matters providing for the payment of money damages or the
claimant and the indemnifying party shall have agreed to settle the action for
an amount of money damage without reservation of any rights or defenses against
the indemnified person, and if the indemnified person elects to appeal the
judgment, decision, ruling, order, or award or amount of the proposed
settlement, as the case may be, then the indemnified person may continue to
defend the action, free of any participation by the indemnifying person, but
the amount of any ultimate liability under this Section 7.0 with respect to
Losses related to or allegedly rising in connection with the matter or matters
that shall have been comprehended by the judgment, decision, ruling, order, or
award or by the proposed settlement, as the case may be, shall then be limited
to the amount of the judgment, ruling, order, or award or the amount of the
proposed settlement, as the case may be, plus the other indemnified losses of
the indemnified person relating to the matter or matters through the date of
its election to appeal or its rejection of the proposed settlement, as the case
may be.
7.5 Contribution. If the indemnification provided for in
this Section 7.0 is unavailable to an indemnified person(s) (other than by
reason of exceptions provided in this Section 7.0), or is insufficient to hold
harmless an indemnified person in respect of any losses, then the indemnifying
person, in lieu of indemnifying the indemnified person, shall contribute to the
amount paid or payable by the indemnified person as a result of the losses in
the proportion that is appropriate to reflect the relative fault of the
indemnifying person, on the one part, and the indemnified person, on the other
part, in connection with the events or circumstances which results in the
losses as well as any other relevant equitable considerations. The relative
fault of the indemnifying person, on the one hand, and of the indemnified
person, on the other hand, shall be determined by reference to, among other
things, those persons' relative intent, knowledge, access to information, and
opportunity to correct or prevent the events or circumstances resulting in the
losses.
7.6 No limitation On Other Rights of Recovery. The
indemnification set forth in this Section 7.0 shall be in addition to any other
obligations or liabilities of persons to an indemnified person hereunder at
common law or otherwise and shall remain operative and in full force and effect
regardless of any investigation made or omitted by or on behalf of any
indemnified party and shall survive the transfer of any shares by Foundation.
The provisions of this Section 7.0 shall not eliminate or otherwise limit the
right of any indemnified person hereunder or any other person to seek or
recover contribution, damages or otherwise enforce (including through specific
performance) its rights without regard to the provisions of this Section 7.0.
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8.0 Miscellaneous Provisions.
8.1 Cooperation and Intent. The Parties agree to the
following:
(a) That it is their intent to consummate all of
the transactions contemplated by this Agreement; and
(b) That they agree to cooperate to the extent
necessary to effectuate and implement all terms and conditions of this
Agreement and, subject to their fiduciary obligations, to exercise their
reasonable best efforts to promptly accomplish the terms and conditions of this
Agreement.
8.2 Third-party beneficiaries.Except as expressly set
forth in this Agreement, nothing herein expressed or implied is intended, or
shall be construed, to confer upon or give any person, firm or corporation,
other than Foundation and Per-Se, any rights or remedies under or by reason of
this Agreement.
8.3 No Admission of Liability. Neither this Agreement nor
any act performed or document executed pursuant to or in furtherance of this
Agreement or the Settlement:
(a) Is or may be deemed to be, or may be used as
an admission of, or evidence of, the validity of any Released Claim, or of any
alleged wrongdoing or liability of Per-Se, the Per-Se Released Persons,
Foundation or the Foundation Released Persons or any of them; or
(b) Is or may be deemed to be, or may be used as
an admission of, or evidence of, any alleged fault or omission of Per-Se,
Foundation, any Foundation Released Persons, or any Per-Se Released Persons, in
any civil, criminal, or administrative proceeding in any court, administrative
agency, or other tribunal, other than in such proceedings as may be necessary
to consummate or enforce this Agreement, except that Per-Se, Foundation, any
Foundation Released Person, or any Per-Se Released persons, or any of them, may
file the Agreement in any action that may be brought against them in order to
support a claim, defense, or counterclaim based on principles of res judicata,
collateral estoppel, release, judgment bar or reduction, or any other theory of
claim preclusion or issue preclusion or similar claim, defense, or
counterclaim.
8.4 Good Faith: Benefit of Counsel. Each of the Parties
intend the Agreement to be final and complete resolution of all disputes
asserted which could be asserted by such Party against Per-Se or Foundation, as
applicable, and the Foundation Released Persons or Per-Se
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Released Persons with respect to the Released Claims. The Parties agree that
the amount paid and the other terms of the Agreement were negotiated at arms'
length in good faith by the Parties and reflect a Settlement that was reached
voluntarily after consultation with experienced counsel.
8.5 Entire Agreement. This Agreement, the Registration
Rights Agreement, the Take-Down Agreement, D&O Settlement Agreement and Current
Agreement constitutes the entire agreement among the Parties with respect to
the subject matter hereof, and no representations, warranties, or inducements
have been made to any Parties concerning the foregoing other than the
representations, warranties, and covenants contained and memorialized in the
foregoing agreements. The Parties further agree, to the extent permitted by
law, that all previous agreements that were made, if any, relating to the
confidentiality of information and requirements for return or destruction of
documents shall survive this Agreement.
8.6 Counterparts. This Agreement may be executed in one or
more counterparts. All executed counterparts and each of them shall be deemed
to be one and the same instrument. Counsel for the Parties shall exchange among
themselves original signed counterparts.
8.7 Successor and Assigns. This Agreement shall be binding
upon, and inure to the benefit of, the successors and assigns of the Parties
hereto.
8.8 Governing Law. This Agreement shall be considered to
have been negotiated, executed, and delivered, and to be wholly performed, in
the State of California, and the rights and obligations of the Parties to this
Agreement shall be governed by, construed, and enforced in accordance with the
laws of the State of California without giving effect to that state's choice of
law or conflicts of law principles.
8.9 Amendments; Waivers. This Agreement may be modified
only by a written instrument signed by all the Parties hereto. No delay on the
part of any Party to this Agreement in the exercise of any power or right under
this Agreement shall operate as a waiver thereof, nor shall waiver or single or
partial exercise of any power or right constitute a waiver of or preclude
further exercise thereof or the exercise of any other power or right.
8.10 Expenses. Except as otherwise provided herein, Per-Se
and Foundation will bear their own expenses with respect to the negotiation,
execution, and delivery of the Agreement and the performance of their
obligations hereunder.
8.11 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by commercial delivery service, or mailed by
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registered or certified mail (return receipt requested) or sent via facsimile
(with confirmation of receipt) to the parties at the following address (or at
such other address for a Party as shall be specified by like notice):
If to Per-Se:
Per-Se Technologies, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: J. Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to Foundation:
Foundation Health Systems, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
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Notice given by personal delivery, courier service, or mail shall be
effective upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All notices by telecopier shall be confirmed
promptly after transmission in writing by certified mail or personal delivery.
Any Party may change any address to which notice is given to it by giving
notice as provided above of such change of address.
8.12 Headings. The headings of the several sections and
subsections of this Agreement are for convenience or reference only and are not
intended to supplement or change the terms of this Agreement.
8.13 Consequences of Breach. If either party breaches a
provision of this Agreement or the Registration Rights Agreement, the other
party shall have the non-exclusive right to apply ex parte to the Los Angeles
Superior Court in the Pending Matter, for an order enforcing the terms of the
Agreement pursuant to California Code of Civil Procedure ss. 664.6. The
prevailing party on any such application shall be entitled to recover from the
other party its attorney's fees and costs expended on the application and its
disposition. In the event of a breach by Per-Se that can be cured by prompt
performance by Per-Se, then Foundation shall be entitled to an order compelling
such performance, in addition to damages resulting from the breach. If the
breach is not capable of prompt cure by Per-Se, then Foundation shall be
entitled to a final judgment in the amount of the then Remaining Amount plus
any additional damages resulting from the breach and attorneys fees and costs.
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IN WITNESS WHEREOF, the undersigned Parties have executed this
Settlement Agreement and Release effective as of the date first set forth
above.
Dated: September 20, 1999
PER-SE TECHNOLOGIES, INC.
By: /s/ Xxxxxxxx X.X. Xxxxx
----------------------------------
Name: Xxxxxxxx X.X. Xxxxx
Title: Executive Vice President
FOUNDATION HEALTH SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
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Title: Vice President, Asst. General Counsel & Asst. Secretary
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